Blockchain Could Reshape $2 Trillion Institutional Finance by 2030

BlackRock, the world's largest asset manager, is reportedly weighing the tokenization of its exchange-traded funds (ETFs) as part of an ongoing shift within the financial industry toward blockchain-based solutions. This development follows reports from JPMorgan that the sector is undergoing a significant transformation driven by demand for faster settlement, increased transparency, and enhanced operational efficiency. While the firm has not made a formal announcement, industry observers suggest that the move could signal broader institutional adoption of tokenized assets, a trend already being tested by firms like Fidelity Investments.

Fidelity recently entered the tokenized real-world assets (RWAs) market with the launch of its Fidelity Digital Interest Token (FDIT), an Ethereum-based token representing shares of a U.S. Treasury securities and cash equivalents fund. The product, available exclusively to institutional investors, charges a 0.20% annual management fee and is managed through the Fidelity Treasury Digital Fund (FYOXX). FDIT is backed by the Bank of New York Mellon and has already attracted over $202 million in assets since its August 2025 launch. However, early data indicates minimal retail participation, with only two identified holders—$1 million with one and the remainder held by another.

Fidelity’s foray into tokenized assets comes as the broader market experiences rapid growth. According to data from RWA.xyz, the market for tokenized U.S. Treasuries has more than tripled in the past year, reaching $7.5 billion. BlackRock’s BUIDL token, in collaboration with Securitize, leads the market with $2.4 billion in assets, followed by offerings from Franklin Templeton and WisdomTree. These tokenized funds are increasingly used as infrastructure for yield-earning strategies and collateral in the crypto economy, demonstrating their growing role in institutional finance.

The move toward tokenization aligns with broader industry trends. Major financial institutions, including JPMorgan and Franklin Templeton, are exploring blockchain-based solutions to reduce settlement times and improve transparency. JPMorgan has noted that the industry is shifting toward tokenization to address inefficiencies in traditional financial systems, particularly in cross-border payments and collateral management. This shift is being driven by regulatory clarity, technological maturation, and institutional demand for digital solutions that can scale.

BlackRock’s potential entry into tokenized ETFs would position it alongside pioneers like Fidelity and BlackRock’s own BUIDL token. The company has been cautious in its adoption of blockchain, but its recent experimentation with tokenized assets—including partnerships with blockchain specialists—suggests growing internal support for digital innovation. The firm’s current focus on tokenized money market funds, such as BUIDL, has already demonstrated the benefits of blockchain in institutional-grade applications, including real-time liquidity and automated yield distribution.

Industry observers also point to the broader market dynamics influencing the shift. McKinsey projects that the tokenized asset market could reach $2 trillion by 2030, while institutional investors are expected to allocate up to 5.6% of their portfolios to tokenized assets by 2026. This growing demand, combined with advancements in blockchain infrastructure and regulatory frameworks, is creating a fertile environment for innovation. The U.S. Securities and Exchange Commission (SEC) has been increasingly active in providing guidance on tokenized securities, treating them as technology-enabled extensions of traditional financial instruments rather than new asset classes.

Despite the potential, challenges remain. Scalability, interoperability, and integration with legacy financial systems continue to pose technical and operational hurdles for widespread adoption. However, pilot programs and partnerships—such as Goldman Sachs’ mirrored tokenization initiative and Citi’s collaboration with Fidelity International—demonstrate that solutions are being developed to address these issues. These initiatives highlight the industry’s commitment to bridging traditional finance with blockchain technology, ensuring that tokenized assets can operate within existing regulatory and institutional frameworks.

As the financial industry continues to evolve, the tokenization of ETFs and other real-world assets is likely to play a pivotal role in reshaping institutional investment strategies. BlackRock’s potential move into this space, combined with the ongoing experimentation by firms like Fidelity, signals that the transition from traditional to digital finance is gaining momentum. While the timeline for full-scale adoption remains uncertain, the current trajectory suggests that tokenization will become a foundational element of institutional finance in the coming years.