The world’s largest asset manager, BlackRock, is reportedly planning to tokenize exchange-traded funds on the blockchain. This follows the firm’s success with its Bitcoin ETF, which has opened it to the crypto industry.
BlackRock To Tokenize ETFs After IBIT Success
According to a Bloomberg report, the asset manager is exploring how to tokenize ETFs and make them available on-chain. The firm plans to tokenize funds that have ties to real-world assets (RWAs), including stocks.
This follows BlackRock’s success with its iShares Bitcoin ETF (IBIT), which is the largest BTC fund. Notably, the asset manager already has its BlackRock USD Institutional Digital Liquidity Fund (BUIDL), a tokenized money market fund, which has a market capitalization of just over $2 billion.
This development comes as tokenization gains ground on Wall Street. Galaxy Digital just became the first Nasdaq-listed firm to tokenize its common stock. Meanwhile, Nasdaq just filed with the SEC, seeking approval to let investors trade tokenized stocks on its platform.
The SEC has already suggested that it is open to supporting the tokenization push from firms such as BlackRock. The commission already launched ‘Project Crypto,’ which aims to enable the U.S. markets to move on-chain. The agency, alongside the CFTC, is also weighing how it can allow these markets to trade 24/7 just like the crypto market.
Meanwhile, it is worth mentioning that BlackRock CEO Larry Fink is an advocate of tokenization. Earlier this year, Fink called on the SEC to approve tokenization of bonds and stocks, as it would help save costs for institutions. He noted that this will also make investing easier and more cost-effective.
Expert Comments On Tokenization Push
Bloomberg analyst James Seyffart indicated he was in support of BlackRock’s move to tokenize ETFs. He stated that just as everyone who downplays digital assets has been proven wrong, those who downplay tokenization will likely be proven wrong as well.
He noted that the tokenization push is “likely a decade-long process.” At the same time, he alluded to Nasdaq’s filing to prove that there is already a movement for the tokenization of real-world assets.
Meanwhile, Seyffart reiterated that the tokenization movement will evolve slowly over time, and it is not going to become the new norm immediately. He then described the move from Nasdaq as “step 3 of 847.”
Boluwatife Adeyemi
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Source: https://coingape.com/blackrock-to-tokenize-etfs-following-bitcoin-etf-success/