BlackRock Leaders Say Tokenization Will Connect Crypto And Global Finance

TLDR

Table of Contents

BlackRock operates the largest tokenized cash fund, BUIDL, worth $2.8 billion.
BlackRock manages over $13.4 trillion in global assets.
Fink and Goldstein say tokenization won’t replace finance but connect it with crypto.
Tokenization can expand assets beyond traditional stocks and bonds.

Digital and Traditional Finance Seen Converging

BlackRock CEO Larry Fink and COO Rob Goldstein have stated that tokenization will act as a bridge between crypto and traditional finance. In an opinion piece published in The Economist, they said the two industries are not in competition but are learning to work together.

They explained, “Think of it instead as a bridge being built from both sides of a river.” On one side are legacy financial institutions, and on the other are digital-first innovators such as stablecoin issuers, fintech firms, and public blockchains. Fink and Goldstein believe these entities will meet in the middle, eventually allowing all asset types to be traded and held in a single digital wallet.

They noted that in the future, people will not need to separate crypto from traditional assets. Instead, users could manage both through one platform. This view marks a shift for Fink, who was previously skeptical of the crypto space.

From Skepticism to Support of Tokenization

The article reflects how BlackRock’s leadership has reassessed the role of digital assets. At first, they said, it was difficult to see the value of tokenization due to the speculative nature of early crypto markets.

However, Fink and Goldstein said traditional finance is now seeing the underlying value. “Tokenization can greatly expand the world of investable assets beyond the listed stocks and bonds that dominate markets today,” they wrote.

BlackRock has already taken steps in this direction. In March 2024, the company launched the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), now the world’s largest tokenized cash market fund with $2.8 billion in assets.

Regulation Needed for Safe Market Integration

BlackRock’s executives emphasized that tokenization must be implemented carefully and with proper oversight. They called for updated rules that would allow traditional financial systems and tokenized markets to function together.

They wrote, “Regulators should aim for consistency: risk should be judged by what it is, not how it’s packaged.” This approach mirrors how bond exchange-traded funds (ETFs) brought more transparency and efficiency to fixed-income markets by linking dealer markets with public exchanges.

They added that the launch of spot Bitcoin ETFs shows that digital assets can now exist within traditional financial infrastructure. They see tokenization as the next step in that progression.

Asset Classification Should Not Depend on Format

Fink and Goldstein argued that the nature of an asset should not change based on whether it exists on a blockchain or in a traditional system. “A bond is still a bond, even if it lives on a blockchain,” they wrote.

They emphasized the need for consistent rules across asset types to support the development of tokenized markets. The goal is to allow all types of investors to benefit from wider access, lower costs, and increased transparency without sacrificing safety.

BlackRock’s view is that tokenization is not replacing traditional finance. Instead, it is expanding the infrastructure of the financial system to include new technologies and asset classes.