BlackRock, the world’s largest asset manager, is considering expanding its tokenized product line to include popular crypto and other exchange-traded funds (ETFs), as reported by Bloomberg. The plan, however, is contingent on regulatory approval.
In less than two years since the launch of its Bitcoin and Ethereum ETFs, BlackRock’s crypto holdings have reached $100 billion. The company’s first tokenized money market fund, BUIDL (BlackRock USD Institutional Liquidity Fund), was introduced in March 2024 and currently boasts a market cap of $2.2 billion, held by 90 firms across six chains.
BlackRock’s CEO, Larry Fink, envisions a future where every asset can be tokenized, revolutionizing investing by enabling markets to operate continuously with instantaneous settlements. He believes this innovation could be as disruptive as ETFs.
Despite the potential benefits, some critics question the value of tokenizing assets. ETF analyst Eric Balchunas argues that the “on-chain” group is still too small to justify the hype, suggesting that traditional ETFs are underestimated.
Nasdaq has also expressed interest in listing tokenized equities with equal rights to traditional shareholders, pending SEC approval. However, SEC Commissioner Hester Peirce notes that tokenized stocks will still be subject to securities laws.
Regulators are working to establish clear guidelines for tokenized assets as interest in the sector grows. The financial market may be on the brink of a revolution as institutions like BlackRock explore the possibilities of on-chain trading for a range of assets beyond cryptocurrencies.