BlackRock looking to tokenize ETF shares to expand its digital asset infrastructure
BlackRock explores tokenizing exchange-traded fund (ETF) shares as a part of its push to expand its digital asset infrastructure past conventional market boundaries.
As Bloomberg News reported on Sept. 11, the agency weighs creating blockchain-based variations of ETFs tied to real-world belongings (RWA), together with shares, in accordance to sources accustomed to the confidential planning.
The initiative builds on BlackRock’s $2.2 billion BUIDL tokenized money-market fund, launched in March 2024, two months after the debut of its Bitcoin ETF.
CEO Larry Fink beforehand acknowledged that every financial asset can be tokenized, most just lately reiterating it in his 2025 annual letter to buyers.
Tokenized ETF shares would allow buying and selling past Wall Street’s customary hours, enhance worldwide entry to US merchandise, and create new collateral alternatives inside crypto networks.
The report is available in the identical week as Nasdaq filed with the SEC to trade tokenized stocks and ETFs on its platform.
Regulatory framework evolves
BlackRock has examined tokenized fund shares by way of JPMorgan’s Kinexys infrastructure and positioned itself as an early adopter of digital settlement fashions.
Money-market funds from Franklin Templeton and BlackRock opened the pathway for the most important tokenization efforts. Excluding personal credit score, tokenized cash funds are the most important RWA class, with a $7.4 billion market cap as of Sept. 11.
At the identical time, ETFs provide broader asset publicity and buying and selling mechanics which can be well-suited for blockchain deployment. Exchanges together with Kraken, Robinhood, and Coinbase already provide tokenized shares internationally or plan to achieve this.
However, the report famous that present challenges embrace reconciling ETF settlement by way of Wall Street clearinghouses with blockchain’s on the spot, 24-hour buying and selling capabilities. These challenges create technical and regulatory questions for custodians managing the transition between conventional and digital infrastructure.
BlackRock’s exploration displays mainstream finance’s analysis of blockchain expertise for enhancing market infrastructure, together with enhancements in collateral flows and settlement pace.
The agency’s digital asset advocacy, mixed with regulatory shifts, positions tokenized ETFs as one other bridge between conventional and decentralized finance methods.
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