BlackRock is actively advancing its blockchain strategy by preparing to tokenize funds, a move responding to the successful launch of its Bitcoin ETF.
Tokenization as BlackRock's Strategy
According to a Bloomberg report, BlackRock is aiming for the tokenization of exchange-traded funds (ETFs) following the successful launch of its Bitcoin ETF. The iShares Bitcoin Trust, launched in 2024, quickly amassed over $10 billion in assets, while the BUIDL tokenized fund has gathered more than $2 billion.
Current State of Tokenized Asset Market
The market for tokenized assets is currently valued at approximately $29 billion, significantly trailing behind the $8 trillion market for traditional ETFs. Nevertheless, firms like Kraken and Robinhood have already tested tokenized equities on overseas exchanges. Nasdaq has also submitted paperwork to the SEC to allow trading of tokenized stocks.
Regulatory Challenges in Tokenization
Despite increasing interest, regulators face challenges integrating tokenized assets into traditional settlement systems. BlackRock is experimenting with JPMorgan's Onyx system, while other financial institutions like Goldman Sachs are also working on adding tokenized assets to their funds. JPMorgan strategist Teresa Ho noted that tokenized money funds could help keep capital within the asset sector.
Thus, BlackRock is aiming to expand its presence in the tokenized assets space despite existing regulatory complexities and competitive challenges from stablecoins.
