BlackRock's top executives are positioning tokenization as the financial industry's equivalent of the early internet, predicting the technology will transform global markets faster than most expect despite currently representing a tiny fraction of traditional asset classes.
CEO Larry Fink and COO Rob Goldstein published a column in The Economist on Monday arguing that recording asset ownership on digital ledgers could modernize finance by enhancing efficiency, transparency, and access. "Ledgers haven't been this exciting since the invention of double-entry bookkeeping," the executives wrote, drawing direct parallels between blockchain's potential impact and how SWIFT revolutionized banking in 1977.
The world's largest asset manager with $13.4 trillion under management has moved aggressively into digital assets, launching spot Bitcoin and Ethereum ETFs that have attracted approximately $60.6 billion and $13.4 billion in net inflows respectively since debuting in 2024. BlackRock has also deployed its own tokenized products, most notably the BUIDL money market fund running on public blockchain infrastructure with $2.3 billion in assets.
The executives' public endorsement represents a significant validation of blockchain technology from traditional finance's establishment, particularly given industry skepticism during the cryptocurrency speculation boom that characterized much of the sector's early development.
What Happened
Fink and Goldstein framed tokenization as the latest stage in a decades-long technological evolution that began when Fink entered finance in the 1970s, when trades were placed by phone and settled through courier-delivered paper certificates. The introduction of SWIFT's standardized electronic messaging between banks cut settlement times dramatically from days to minutes, setting the stage for today's millisecond execution speeds.
Bitcoin's 2009 deployment of blockchain technology by Satoshi Nakamoto introduced shared digital ledgers that could record transactions without intermediaries, the executives noted. That breakthrough enabled tokenization - allowing virtually any asset from real estate to corporate debt to exist as independently verifiable digital records.
"At first it was hard for the financial world - including us - to see the big idea," Fink and Goldstein acknowledged. "Tokenization was tangled up in the crypto boom, which often looked like speculation. But in recent years traditional finance has seen what was hiding beneath the hype: tokenization can greatly expand the world of investable assets beyond the listed stocks and bonds that dominate markets today."
The executives highlighted two primary advantages: instantaneous settlement potential and replacement of paper-heavy private market processes with code. Standardizing instant settlement across global markets would reduce counterparty risk, while digitizing private assets could lower costs, improve efficiency, and convert large illiquid holdings into smaller units accessible to broader participation.
BlackRock pointed to early evidence that tokenized real-world assets have grown roughly 300% over the past 20 months, though they remain a small fraction of global markets. Much of the initial adoption is occurring in developing economies with limited banking access, while the United States still hosts many companies best positioned to lead tokenized financial infrastructure.
Also read: Grayscale Predicts Bitcoin Will Break Four-Year Cycle, Hit New Highs in 2026
Why It Matters
The comparison to the internet in 1996 - when Amazon had sold just $16 million worth of books and three of today's "Magnificent Seven" tech giants hadn't been founded - suggests Fink and Goldstein expect exponential rather than linear growth. Their argument positions tokenization not as replacing existing financial systems but as a bridge between traditional institutions and "digital-first innovators" including stablecoin issuers, fintechs, and public blockchains.
The executives envision investors eventually buying, selling, and holding all asset types through a single digital wallet, eliminating the current separation between traditional portfolios and cryptocurrency holdings. This integration would fundamentally reshape market infrastructure that has remained relatively unchanged for decades despite incremental technological improvements.
BlackRock's embrace of tokenization carries particular weight given its dominance in exchange-traded funds. The firm's Bitcoin ETF IBIT reached $70 billion in assets within 341 days, becoming the 22nd largest ETF overall and generating an estimated $245 million in annual fees. The Ethereum fund ETHA similarly commands a 72.5% share of US ETH ETF flows, demonstrating institutional appetite for regulated digital asset exposure.
However, Fink and Goldstein emphasized that realizing tokenization's potential requires regulatory frameworks that update existing rules rather than creating entirely new systems. "A bond is still a bond, even if it lives on a blockchain," they wrote, calling for clear buyer protections, strong counterparty-risk standards, and robust digital-identity verification systems.
The executives cautioned that early advantages can erode quickly, noting that while American companies currently dominate including major stablecoin issuers, maintaining leadership isn't guaranteed. Their message to policymakers stressed the urgency of matching expanded market access with modernized safeguards - tokenization "must move faster and move safely," they concluded.
For crypto markets, BlackRock's public commitment to tokenization represents validation from the financial establishment that blockchain technology has applications extending far beyond speculative trading. The firm's $2.3 billion BUIDL fund demonstrates institutional willingness to deploy capital into on-chain products, while the success of its spot crypto ETFs confirms demand for regulated digital asset vehicles.
Whether tokenization develops as rapidly as the internet remains uncertain, but BlackRock's positioning suggests the world's largest asset manager is preparing for that scenario rather than dismissing it as distant possibility.
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