- BlackRock considers tokenized ETFs after $2.2B BUIDL fund and $10B Bitcoin ETF success.
- Nasdaq and SEC explore tokenized stock trading while Franklin Templeton and Fidelity join.
- Larry Fink says every asset can be tokenized though analysts see a gradual decade long shift.
BlackRock is evaluating ways to issue tokenized exchange-traded funds on blockchain networks. The move comes after strong growth in its tokenized money market fund and Bitcoin ETF. Tokenized ETFs could allow around-the-clock trading, easier cross-border access, and new collateral uses while facing ongoing regulatory and settlement challenges.
Growing focus on blockchain based investment funds
BlackRock, the world’s largest asset manager, is exploring tokenized exchange-traded funds tied to real-world assets such as stocks. According to Bloomberg, the company is considering moving funds onto blockchain networks. Such funds could allow trading outside Wall Street’s limited hours and expand access for international investors.
BlackRock already manages the BlackRock USD Institutional Digital Liquidity Fund, known as BUIDL, which has $2.2 billion in assets. The fund is tokenized across Ethereum, Avalanche, Polygon, Aptos, and other networks. Its success has made it one of the largest tokenized funds available.
The company also manages the iShares Bitcoin Trust, which surpassed $10 billion in assets within a year of launch. This rapid growth has added momentum to BlackRock’s tokenization initiatives and increased industry interest in blockchain-based investment vehicles.
Market challenges and industry response
Tokenized ETFs still face challenges as traditional clearinghouse systems must be reconciled with blockchain’s instant settlement. Regulators, custodians, and exchanges continue to test pilot programs to bridge the two structures.
The U.S. Securities and Exchange Commission has launched “Project Crypto” to study on-chain markets with the Commodity Futures Trading Commission. Nasdaq has filed with the SEC to permit trading of tokenized stocks on its platform, which could set a new precedent. At the same time, Franklin Templeton, Fidelity, and other asset managers are preparing tokenized funds.
Platforms such as Kraken and Robinhood have already offered tokenized equities in overseas markets. Larry Fink, BlackRock’s CEO, has stated that “every financial asset can be tokenized” to increase speed and lower costs. Bloomberg analyst James Seyffart noted that tokenization is “likely a decade-long process” and described Nasdaq’s move as “step 3 of 847.”
