BlackRock Experiments with Tokenization of S&P 500 ETFs on Blockchain.

BlackRock, the world's largest asset manager, is reportedly exploring ways to tokenize its exchange-traded funds (ETFs) and offer them on blockchain platforms. This move, subject to regulatory approval, would mean that fund shares would be issued as tokens on the blockchain, allowing for 24/7 trading. BlackRock offers numerous ETFs under the iShares brand, including popular options such as the iShares MSCI Emerging Markets ETF and iShares Core S&P 500 ETF.

BlackRock, the world's largest asset manager, is reportedly exploring ways to tokenize its exchange-traded funds (ETFs) and offer them on blockchain platforms. This move, subject to regulatory approval, would mean that fund shares would be issued as tokens on the blockchain, allowing for 24/7 trading. BlackRock offers numerous ETFs under the iShares brand, including popular options such as the iShares MSCI Emerging Markets ETF and iShares Core S&P 500 ETF.

The initiative 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. The success of BlackRock's spot Bitcoin ETF, which quickly became one of the most successful funds of its kind, has also paved the way for this new exploration BlackRock Plans $2T Real-World Asset Boom with the Tokenization of ETFs^[1].

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 .

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 . 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 . Despite the optimism, major hurdles remain, including reconciling traditional ETF settlement systems with the instant and continuous movement of tokenized assets.

Institutional interest is 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 .

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 .

Despite the challenges, the potential benefits of tokenization for ETFs are significant. If successful, this move could bridge the gap between Wall Street and the crypto world, opening up new markets and investment opportunities for both institutional and retail investors.