BlackRock is exploring the tokenization of exchange-traded funds (ETFs). The aim, according to a recent Bloomberg report, is to bring a new wave of real-world asset funds onto blockchain rails, pending regulatory approval.
The move follows BlackRock’s recent successes with its Bitcoin ETF and tokenized cash-management fund, signaling a major shift in how traditional financial products can connect with digital asset infrastructure.
After reaping robust inflows with its spot Bitcoin ETF and quickly amassing $2.2 billion in its tokenized BUIDL money market fund, BlackRock’s leadership is thinking bigger. The asset management giant is now considering how to launch tokenized ETFs covering a wide spectrum of real-world assets, most notably equities.
What Tokenization at BlackRock Could Mean
These tokens might facilitate quick settlement, allow trading outside of regular market hours, and open up ETF investing to a worldwide audience, even in countries with restricted access to traditional ETFs. Additionally, the invention may redefine the function of ETF shares in the digital economy by enabling their use as collateral in decentralised finance (DeFi) systems.
Tokenization’s proponents contend that it simplifies processes, reduces settlement times from days to minutes, and permits fractional ownership, which makes it possible for smaller investors to participate. Larry Fink, the CEO of BlackRock, has been outspoken on the subject, pointing out the revolutionary possibilities for investors and markets and forecasting that “all financial assets can eventually be tokenised.”
Regulations Drive Adoption
While the technology is essentially ready, BlackRock’s ambitious plans hinge on regulatory approval. Reconciling instantaneous blockchain settlements with legacy infrastructure, such as clearinghouses and custodians, remains a challenge. The company is already conducting backend trials with partners like JPMorgan’s Kinexys platform to test blockchain trading mechanisms.
BlackRock’s ETF tokenization project is part of a broader movement in global finance. Major institutions, including JPMorgan, Goldman Sachs, and Nasdaq, are experimenting with tokenized stocks, bonds, and funds.
Asia’s SBI Holdings is also developing platforms for on-chain institutional investment, projecting a tokenized asset market worth $18 trillion by 2033.
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