BlackRock Aims for $2T Tokenization Boom with ETFs

BlackRock is exploring the tokenization of exchange-traded funds (ETFs) tied to real-world assets such as stocks, following its earlier ventures into digital assets. Tokenization involves creating blockchain-based versions of traditional financial assets, which 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. The concept is gaining momentum across the financial industry, with potential for a $400 trillion traditional finance market to be tapped into.

BlackRock, the world's largest asset manager, is exploring the tokenization of exchange-traded funds (ETFs) tied to real-world assets such as stocks, following its earlier ventures into digital assets. Tokenization involves creating blockchain-based versions of traditional financial assets, which 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. The concept is gaining momentum across the financial industry, with potential for a $400 trillion traditional finance market to be tapped into.

BlackRock's interest in tokenization comes after the success of its spot Bitcoin ETFs, which have attracted significant inflows. The company's iShares Bitcoin Trust and iShares Ethereum Trust have seen cumulative inflows of $55 billion and $12.7 billion, respectively, with both funds reaching $10 billion in assets under management within one year BlackRock Explores ETF Tokenization After Bitcoin Success^[1]. This success has prompted BlackRock to consider tokenized ETF structures that could trade beyond traditional market hours and serve as collateral in decentralized finance (DeFi) applications.

JPMorgan strategists have called tokenization a "significant leap" for the $7 trillion money market fund industry BlackRock Explores ETF Tokenization After Bitcoin Success^[1]. BlackRock has previously tested tokenized fund shares on JPMorgan's Onyx blockchain, now known as Kinexys, and CEO Larry Fink has repeatedly expressed his belief that every financial asset can ultimately be tokenized BlackRock Plans $2T Real-World Asset Boom with the Tokenization of ETFs^[2]. The company's tokenized money-market fund, BUIDL, became the first such product to cross $1 billion in assets in March 2025 BlackRock Explores ETF Tokenization After Bitcoin Success^[1].

The tokenized real-world assets (RWAs) market has already hit an all-time high of $26.5 billion in 2025, with most of the growth concentrated in private credit and U.S. Treasuries BlackRock Plans $2T Real-World Asset Boom with the Tokenization of ETFs^[2]. 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 BlackRock Plans $2T Real-World Asset Boom with the Tokenization of ETFs^[2]. Despite the optimism, major hurdles remain, including reconciling traditional ETF settlement systems with blockchain-based markets and regulatory challenges.

BlackRock's expansion into digital assets is evident in its reporting of $79.6 billion in digital assets under management (AUM) as of July 2025, with digital products accounting for $14 billion of the firm's overall ETF inflows during the quarter BlackRock Plans $2T Real-World Asset Boom with the Tokenization of ETFs^[2]. The company'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 BlackRock Plans $2T Real-World Asset Boom with the Tokenization of ETFs^[2].

Institutional interest in tokenization is growing, with new market launches and partnerships emerging. For example, 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 BlackRock Plans $2T Real-World Asset Boom with the Tokenization of ETFs^[2]. Japanese conglomerate SBI Holdings partnered with crypto infrastructure provider Startale to develop an institutional-grade on-chain platform for tokenized stocks and RWAs BlackRock Plans $2T Real-World Asset Boom with the Tokenization of ETFs^[2]. The partners estimate the global opportunity for tokenized assets could reach $18.9 trillion by 2033.

Despite the potential benefits, the adoption of tokenized ETFs remains uncertain. Bloomberg ETF analyst Eric Balchunas expressed skepticism about consumer adoption, noting that on-chain users represent a small fraction of global investment capital BlackRock Explores ETF Tokenization After Bitcoin Success^[1]. However, the increasing interest and experimentation by traditional banks and blockchain-native firms suggest that tokenization could become a significant trend in the financial industry.