BlackRock, known as the world’s largest asset manager, is making significant strides in integrating blockchain technology with one of Wall Street’s favored investment instruments: exchange-traded funds (ETFs). A recent report by Bloomberg indicates that BlackRock is assessing the potential for tokenizing ETFs linked to real-world assets, including stocks, while navigating the complex regulatory landscape.
This exploration follows BlackRock’s initial foray into the digital assets space. In 2024, the firm introduced its tokenized money-market fund, dubbed BUIDL, which has since amassed over $2 billion in assets, gaining traction within various cryptocurrency platforms. This launch coincided with the remarkable success of its spot Bitcoin ETF, which quickly established itself as one of the most successful funds of its kind.
The tokenization of ETFs could serve as a bridge between traditional finance and the burgeoning world of cryptocurrency. Tokenization is the process of creating blockchain representations of traditional financial assets. For ETFs, this shift could lead to trading opportunities outside conventional market hours, broaden international access, and introduce innovative solutions for utilizing shares as collateral in crypto networks. Proponents of tokenization suggest it can provide immediate settlement options, fractional ownership possibilities, and enhanced market efficiency.
This concept is gaining traction within the financial sector. Other asset managers, such as Franklin Templeton, have already initiated the issuance of tokenized share classes of money-market funds. BlackRock has consistently demonstrated its commitment to being an early innovator; it has previously conducted tests on tokenized fund shares using JPMorgan’s Onyx blockchain, now rebranded as Kinexys. CEO Larry Fink has long expressed the belief that every financial asset is ultimately subject to tokenization. In his 2025 annual letter to investors, he reaffirmed the transformative potential of tokenization in reshaping financial markets.
The opportunity presented by tokenization is vast, with recent research from Animoca Brands suggesting that tokenization of real-world assets could eventually unlock access to the $400 trillion traditional finance market. Furthermore, Animoca has reported that the tokenized real-world asset market has currently reached an all-time high of $26.5 billion in 2025, marking a substantial 70% increase since the beginning of the year. The majority of this growth has been concentrated in private credit and U.S. Treasuries, which collectively represent nearly 90% of the total tokenized asset value.
An accelerating pace of adoption is evident in various industry reports. The 2025 Skynet RWA Security Report forecasts that the tokenized real-world asset market could surge to $16 trillion by 2030, with U.S. Treasuries expected to lead the near-term growth. This year alone, tokenized Treasuries are projected to reach a value of $4.2 billion, as both traditional banks and blockchain-centric firms explore RWA products for yield generation and liquidity management.
This increasing institutional focus on ETFs as a testing ground for tokenized markets is exemplified by new market launches. For instance, Ondo Finance recently debuted Ondo Global Markets, offering tokenized access to over 100 U.S. stocks and ETFs for eligible non-U.S. investors. Currently operational on the Ethereum blockchain, the platform enables 24/5 minting and redeeming of tokenized securities, which are backed one-to-one by underlying assets held at U.S.-registered broker-dealers.
In Asia, the partnership between Japanese conglomerate SBI Holdings and crypto infrastructure provider Startale aims to create an institutional-grade on-chain platform for tokenized stocks and real-world assets. Their collaborative estimate suggests a global opportunity for tokenized assets could reach $18.9 trillion by 2033, with the platform facilitating 24/7 trading, cross-border settlements, and fractional ownership features.
Despite the optimism surrounding these advancements, significant challenges remain. Traditional ETFs settle through Wall Street’s clearinghouses, while tokenized assets facilitate instantaneous and continuous trading, creating a need for regulatory and custodial adjustments. Nonetheless, U.S. policymakers are exhibiting increased willingness to explore controlled testing of blockchain-based market systems.
To further solidify its engagement in digital assets, BlackRock’s digital assets under management (AUM) reached $79.6 billion, with net inflows of $14.1 billion for the second quarter of 2025. This figure, although representing 1% of the firm’s overall $12.5 trillion assets, stands as one of its fastest-growing segments. Notably, digital products accounted for $14 billion of BlackRock’s $85 billion in overall ETF inflows during this quarter, showcasing persistent institutional demand despite market fluctuations.
The firm’s flagship spot Bitcoin ETF, IBIT, has attracted $6.96 billion in inflows for 2025, surpassing the SPDR Gold Trust to become the sixth most popular ETF in the United States. As developments unfold, BlackRock’s commitment to transformation and innovation within the digital assets realm continues to position it at the forefront of a rapidly evolving financial landscape.
