BlackRock Eyes Blockchain for ETFs After Bitcoin Fund Success

BlackRock is exploring ways to tokenize ETFs on the blockchain, following the success of its tokenized money-market fund and Bitcoin ETF. The move could enable trading beyond Wall Street's set hours, make US products easier to access abroad, and create new uses as collateral in crypto networks. While tokenization faces regulatory hurdles, the climate has become more permissive under the Trump era.

BlackRock Inc. (NYSE: BLK), the world's largest asset manager, is exploring ways to tokenize exchange-traded funds (ETFs) on the blockchain, following the success of its tokenized money-market fund and Bitcoin ETF BlackRock Seeks to Tokenize ETFs After Bitcoin Fund Breakthrough^[2]. This move could revolutionize the trading of ETFs by enabling 24/7 trading, making US products more accessible globally, and creating new uses as collateral in crypto networks.

Tokenization involves converting traditional assets into digital tokens that can be traded on blockchain systems. For ETFs, this could mean trading beyond Wall Street's set hours, making US products easier to access abroad, and creating potential new uses as collateral in crypto networks BlackRock Seeks to Tokenize ETFs After Bitcoin Fund Breakthrough^[2].

BlackRock's interest in tokenization is not new. In 2024, it launched a tokenized money-market fund, known as BUIDL, which has grown to more than $2 billion and is popular on crypto platforms. The firm also tested tokenized fund shares in trades on JPMorgan’s Onyx, now known as Kinexys, infrastructure BlackRock Seeks to Tokenize ETFs After Bitcoin Fund Breakthrough^[2].

The move comes as exchanges like Kraken and Robinhood offer tokenized stocks overseas and as startups pilot similar services in controlled settings. Nasdaq Inc. has also asked regulators to let investors trade tokenized versions of stocks on its exchange, a move that could mark the first major test of blockchain technology inside the core of US equity markets BlackRock Seeks to Tokenize ETFs After Bitcoin Fund Breakthrough^[2].

However, tokenization faces regulatory hurdles. ETFs today settle through Wall Street’s clearinghouses, while blockchain-traded tokens move instantly and around the clock. Reconciling these systems raises questions for regulators and custodians. Still, the climate has grown more permissive, with policymakers under the Trump era signaling openness to programs that allow firms to test blockchain-based markets in contained environments BlackRock Seeks to Tokenize ETFs After Bitcoin Fund Breakthrough^[2].

BlackRock's exploration underscores how mainstream finance is beginning to test whether the blockchain can rewire market infrastructure, from collateral flows to settlement speed. The market for tokenized assets is still small — about $28 billion — compared with the multi-trillion-dollar US ETF industry BlackRock Seeks to Tokenize ETFs After Bitcoin Fund Breakthrough^[2].

BlackRock's Chief Executive Officer, Larry Fink, has been a big booster of digital assets. He reiterated the view in his 2025 annual letter to investors that every financial asset can be tokenized BlackRock Seeks to Tokenize ETFs After Bitcoin Fund Breakthrough^[2].