Once skeptical of cryptocurrencies, BlackRock's CEO Larry Fink, alongside COO Rob Goldstein, now advocate for tokenization as a crucial link between the crypto industry and traditional finance. In a joint piece for The Economist, they emphasized that while tokenization won't immediately overhaul current financial systems, it holds the potential to unify these two sectors. They described this process metaphorically as constructing a bridge from opposite riverbanks, with traditional financial entities on one side and digital pioneers, including stablecoin issuers and fintech companies, on the other. The goal is not competition, but rather integration. In this envisioned future, various assets, including stocks, bonds, and cryptocurrencies, might be managed through a single digital wallet.
BlackRock, the world's leading asset manager with over $13.4 trillion under its care, has seen its CEO Fink shift from skepticism to support of crypto. Initially, tokenization seemed tangled in speculative crypto trends, but now its potential to expand investable assets beyond traditional stocks and bonds is evident. BlackRock itself has ventured into this space with the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), the largest tokenized cash market fund, valued at $2.8 billion since its launch in March 2024.
Fink and Goldstein also stressed the importance of safe tokenization through updated regulations, urging policymakers to enable collaboration between traditional finance and tokenized markets. Drawing parallels to bond exchange-traded funds (ETFs), which linked dealer markets with public exchanges, they highlighted the recent inclusion of spot Bitcoin ETFs on traditional platforms as another bridge-building innovation. They argued for regulatory consistency, suggesting that asset risk should be assessed by its nature rather than its form, pointing out that a blockchain-based bond remains a bond.