BlackRock plans to develop tokenization technology following success of Bitcoin and Ethereum ETFs

BlackRock CEO Larry Fink stated that the company is working to bring real-world assets (RWAs), such as exchange-traded funds (ETFs), on-chain through the development of a tokenization technology.

BlackRock plans to launch tokenization technology

BlackRock is developing ways to bring RWAs on-chain through tokenization, CEO Larry Fink said on Tuesday. 

Speaking during the firm's third-quarter earnings call, Fink said the move could eventually allow investors to access ETFs in tokenized form, broadening participation in capital markets.

"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," Fink stated.

Fink added that teams across the firm are exploring tokenization as a means to make markets more efficient and accessible. He mentioned that tokenization has grown but is still largely being used by "young people." 

"We're just at the beginning of the tokenization of all assets from real estate to equities to bonds, across the board," Fink shared in an interview with CNBC.

Fink stated that introducing tokenized versions of traditional assets earlier could help investors better prepare for long-term goals like retirement.

He also said the firm sees the tokenization of RWAs as the next "wave of opportunity" over the next decade, citing the increasing shift from traditional assets to their tokenized versions.

BlackRock's assets under management (AuM) rose to $13.4 trillion in the third quarter, up from $11.4 trillion a year earlier. The firm generated $61 million in revenue from its digital asset products, a small portion of its total $6.5 billion in quarterly revenue, according to its earnings report.

The asset manager also operates the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), the largest tokenized money market fund available. Launched last year, the fund has grown to $2.8 billion in assets, according to data from RWA.xyz.

With the crypto market now valued at around $4 trillion, much of which is held in wallets outside the US, Fink stated that tokenizing ETFs could help draw a wider pool of investors into traditional markets.

BlackRock was among the initial firms that launched spot Bitcoin (BTC) and Ethereum (ETH ETFs in the US following regulatory approvals in 2024. The IBIT and ETHA are currently the largest funds of their kind, managing $93 billion and $17 billion in assets, respectively, within two years of launching.

IBIT saw net inflows of $60 million on Monday despite a broader wave of outflows across Bitcoin ETFs totaling $326 million. On the other hand, ETHA witnessed the strongest outflows among its peers, totaling $310 million. The outflows follow a sustained pullback among crypto assets after last weekend's dip.