Major asset managers are making significant strides in the digital asset arena, with Franklin Templeton recently partnering with blockchain powerhouse Binance to create innovative financial products. This collaboration illustrates a broader trend among leading asset management firms to venture into the world of digital assets and tokenization.
BlackRock, the largest asset manager globally, is actively investigating how to offer exchange-traded funds (ETFs) in tokenized formats on public blockchains. According to sources familiar with the situation, the firm is particularly interested in tokenizing funds associated with real-world assets such as stocks, although the realization of such plans is contingent upon securing regulatory approval.
This development follows BlackRock’s previous initiatives in the digital asset space, including its tokenized money-market fund, BUIDL, which has reportedly surpassed $2 billion in assets since its inception in 2024. The fund has garnered interest across various cryptocurrency platforms and complements BlackRock’s successful ventures, including its spot Bitcoin ETF.
Tokenization—the process of digitizing traditional assets for operation on blockchain platforms—offers a range of benefits. It allows ETFs to trade around the clock, enhancing accessibility for global investors and creating new potential for using assets as collateral within crypto networks. Advocates claim that the transition could enable immediate settlements and allow for fractional ownership, though the current market for tokenized assets remains relatively modest, estimated at around $28 billion, in stark contrast to the multi-trillion-dollar U.S. ETF industry.
BlackRock’s exploration aligns with an increasing interest from various financial institutions—ranging from banks to fintech companies—in utilizing blockchain technology for bonds, private credits, and traditional equity funds. The firm has also conducted experiments with tokenized fund shares using JPMorgan’s Kinexys infrastructure, branding itself as an early adopter of digital settlement models.
Larry Fink, BlackRock’s Chief Executive, expressed his strong belief in tokenization’s potential in his latest annual letter, stating that every financial asset can undergo this transformative process. He emphasized that tokenization can facilitate fractional ownership, breaking down barriers to investing in previously inaccessible assets such as private real estate and private equity.
Franklin Templeton is similarly advancing its digital asset efforts. The partnership with Binance aims to merge Franklin Templeton’s compliance expertise in tokenization with Binance’s extensive global trading infrastructure. Sandy Kaul, head of innovation at Franklin Templeton, noted that as blockchain technologies transition from niche applications to mainstream finance, collaborations like this one are key to fostering adoption.
Roger Bayston, who leads digital assets at Franklin Templeton, highlighted the firm’s mission to turn tokenization from a concept into a practical solution, enabling clients to gain efficiencies in settlement, collateral management, and scaled portfolio construction. Specific products stemming from this collaboration are anticipated to be announced later this year.
This momentum in the digital asset sector coincides with advances from exchanges like Kraken and Robinhood that are offering tokenized stocks in international markets. Additionally, Nasdaq has approached regulators to facilitate the trading of tokenized equities on its platform, which could pave the way for a significant application of blockchain technology in U.S. equity markets.
