- BlackRock is exploring tokenization of ETFs tied to real-world assets (stocks, etc.), beyond its existing tokenized money-market fund.
- The initiative is subject to securities regulation, custody rules, identity verification, and other legal/regulatory approvals, according to Bloomberg.
- The firm’s tokenized money-market fund BUIDL has already gathered over $2 billion.
The world’s largest asset manager, BlackRock is reportedly planning to convert traditional exchange-traded funds (ETFs) into tokenized form on blockchain networks, a Bloomberg report claimed. The proposal follows the success of its tokenized money-market product, and comes amid broader regulatory evolutions and growing institutional comfort with crypto infrastructure.
Built on prior success
According to the Bloomberg report, BlackRock is “weighing ways to make ETFs available as tokens on the blockchain.” These would be ETFs tied to real-world assets (for example, stocks), subject to regulatory approvals. BlackRock already has a tokenized money-market fund known as BUIDL, launched in 2024. It is built on blockchain rails and has attracted more than $2 billion in assets.
The success of its spot Bitcoin ETF (and other crypto-linked offerings) has paved the way for higher comfort with digital asset infrastructure and pointing to tokenization as a logical next step in its innovation curve.
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Exploring tokenization of ETFs
Tokenized ETFs would mean the shares or units of ETFs being represented as digital tokens on a blockchain. The advantages could include 24/7 trading, faster settlement, global access, fractional ownership, and perhaps greater efficiency in back-office processes.
If successful, this could mark a major evolution in how ETFs (one of the most widely used investment vehicles) are issued, held, transferred, and traded. It may blur the line further between traditional finance (TradFi) and decentralized finance (DeFi).
