BlackRock Developing Tokenization Tech Amid Bitcoin, Ethereum ETF Success

The world’s largest asset manager is developing its own technology related to digital representations of traditional assets, BlackRock CEO Larry Fink said on Tuesday.

If the company—which disclosed a record $13.46 trillion in assets under management—could move toward offering ETFs as tokens to investors, then that would broaden access to capital markets and reduce fees, he said during the firm’s third-quarter earnings broadcast.

As BlackRock leans deeper into digital assets, Fink said the firm is already “having conversations with all the major platforms” in finance about how they can play a role in BlackRock’s tokenization push, within the context of digital wallets.

Since Fink touted tokenization as the future of markets in 2022, he has remained as a high-profile backer of the technology on Wall Street, serving as a potential harbinger for how the most influential financial institutions could adopt digital assets over time. 

“It is our belief that we need to be moving rapidly,” Fink said of tokenization. “We need to be tokenizing all assets, especially assets that have multiple levels of intermediaries.”

Although BlackRock isn’t focusing on digital representations of real estate, Fink highlighted it as one area that tokenization could reduce fees. Because every intermediary involved is charging fees, Fink said tokenization could make home ownership more affordable.

Tokenized assets have seen some adoption among individual investors, but Fink said “young people” are the ones that are heavily using them. Introducing them to more traditional assets sooner could allow investors to better prepare for life events like retirement, he posited.

BlackRock’s USD Institutional Digital Liquidity Fund, or BUIDL, which debuted last year, is among the largest tokenized assets at $2.8 billion, according to data from RWA.xyz. As of Tuesday, it had 89 holders, while being issued by a firm called Securitize.

BlackRock led a $47 million strategic funding round in Securitize this year. BlackRock’s Global Head of Strategic Ecosystem Partnerships, Joseph Chalom, called the firm’s investment “another step in the evolution of our digital assets strategy” at the time.

BlackRock is behind the largest ETFs for Bitcoin and Ethereum, which have $93 billion and $17 billion worth of assets under management, respectively, according to CoinGlass data.

Although BlackRock is racing towards tokenized markets, Fink suggested that it might be a while before the public gets a clearer look at what the Wall Street titan has in store

“I do believe we have some exciting announcements in the coming years on how we could play a larger role on this whole idea of the tokenization and digitization of all assets,” he said. “We’re spending a great deal of time on the tech. I’m trying to develop our own technology related to this.”