BlackRock Plans $2T Real-World Asset Boom with the Tokenization of ETFs

BlackRock Plans $2T Real-World Asset Boom with the Tokenization of ETFs

BlackRock, the world’s largest asset manager, is exploring how to bring one of Wall Street’s most popular investment vehicles into the blockchain era.

According to a Bloomberg report, the New York-based firm is weighing how to tokenize exchange-traded funds (ETFs) tied to real-world assets such as stocks, subject to regulatory considerations.

The move follows BlackRock’s earlier ventures into digital assets. In 2024, the company launched its tokenized money-market fund BUIDL, which has grown to more than $2 billion in assets and has gained traction across crypto platforms.

That launch came shortly after the blockbuster debut of its spot Bitcoin ETF, which quickly became one of the most successful funds of its kind.

ETFs Could Bridge Wall Street and Crypto Through Tokenization

Tokenization involves creating blockchain-based versions of traditional financial assets. In the case of ETFs, digitization could facilitate trading outside Wall Street’s usual hours, allow easier international access, and create new possibilities for using shares as collateral within crypto networks.

Advocates argue that tokenization can deliver instant settlement, fractional ownership, and more efficient market structures.

The concept is beginning to gain momentum across the financial industry. Asset managers, including Franklin Templeton, have already issued tokenized share classes of money-market funds.

BlackRock has consistently positioned itself as an early mover in this space. The company has previously tested tokenized fund shares on JPMorgan’s Onyx blockchain, now known as Kinexys, and Chief Executive Officer Larry Fink has repeatedly said he believes every financial asset can ultimately be tokenized.

In his 2025 annual letter to investors, Fink reiterated that tokenization has the potential to transform financial markets.

The scale of the opportunity is vast. According to new research from Animoca Brands, tokenization of real-world assets could eventually tap into the $400 trillion traditional finance market.

Additionally, Animoca reported that the tokenized RWA market has already hit an all-time high of $26.5 billion in 2025, a 70% increase since the start of the year. Most of that growth has been concentrated in private credit and U.S. Treasuries, which together account for nearly 90% of tokenized value.

Other reports indicate the accelerating pace of adoption. The 2025 Skynet RWA Security Report projected that the tokenized RWA market could reach $16 trillion by 2030, with U.S. Treasuries leading near-term growth.

Tokenized treasuries alone are expected to reach $4.2 billion this year. The report added that both traditional banks and blockchain-native firms are experimenting with RWA products for yield generation and liquidity management.

Institutions Bet on ETFs as Proving Ground for Tokenized Markets

Institutional interest is also evident in new market launches. In September, Ondo Finance rolled out Ondo Global Markets, a platform offering tokenized access to over 100 U.S. stocks and ETFs for eligible non-U.S. investors.

The service, currently live on Ethereum, allows 24/5 minting and redeeming of tokenized securities backed one-to-one by underlying assets held at U.S.-registered broker-dealers.

In Asia, Japanese conglomerate SBI Holdings partnered with crypto infrastructure provider Startale in August to develop an institutional-grade on-chain platform for tokenized stocks and RWAs.

The partners estimate the global opportunity for tokenized assets could reach $18.9 trillion by 2033. They say their platform will provide 24/7 trading, cross-border settlement, and fractional ownership capabilities.

Despite the optimism, major hurdles remain. Traditional ETFs settle through Wall Street’s clearinghouses, while tokenized assets move instantly and continuously. Reconciling these systems raises regulatory and custodial challenges.

Still, policymakers in the United States have indicated greater openness to controlled testing of blockchain-based markets.

Nasdaq has also sought approval to allow tokenized stock trading on its exchange, a move that could bring blockchain technology into the core of U.S. equities.

BlackRock Ramps Up Digital Asset Push With $79.6B Under Management

BlackRock is accelerating its expansion into digital assets, reporting $14.1 billion in net inflows for the second quarter of 2025 as of July.

The surge lifted the firm’s digital assets under management (AUM) to $79.6 billion, just 1% of its $12.5 trillion total, but it is among its fastest-growing segments.

Digital products accounted for $14 billion of the firm’s $85 billion in overall ETF inflows during the quarter. Year-to-date, inflows have reached $17 billion, showing continued institutional demand despite market volatility.

The products generated $40 million in base fees and securities lending revenue in Q2, a modest figure compared with traditional classes, but showing a new stream of yield from crypto.

The firm’s flagship spot Bitcoin ETF, IBIT, has drawn $6.96 billion in 2025 inflows, surpassing the SPDR Gold Trust to become the sixth most popular U.S. ETF.

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