BlackRock CEO Says Tokenization Could Integrate Cryptocurrencies and TradFi
BlackRock CEO Larry Fink and COO Rob Goldstein, both cryptocurrency skeptics, said tokenization would serve as a bridge between the cryptocurrency industry and traditional finance, doubling down on support for the sector.
In an opinion piece written by Fink and Goldstein and published Monday in The Economist, the pair predicted that while tokenization won’t replace the traditional financial system anytime soon, it will help integrate the two industries.
“Instead, think of it as a bridge built on both sides of a river and converging in the center, with traditional institutions on one side and digital-first innovators like stablecoin issuers, fintechs, and public blockchains on the other,” the two wrote.
“The two are not competing as much as they are learning to interoperate. In the future, people won’t keep stocks and bonds in one portfolio and cryptocurrencies in another. One day, all kinds of assets will be able to be bought, sold and held through a single digital wallet.”
BlackRock is the world’s largest asset manager, managing over $13.4 trillion in assets, and Fink, BlackRock’s co-founder and CEO, was a cryptocurrency skeptic before changing his mind.
The financial world is finally able to see the benefits of tokenization.
Fink and Goldstein said the “big idea” was difficult to grasp at first glance because tokenization was tied to the cryptocurrency boom, which “often seemed speculative.”
“But in recent years, traditional finance has seen what’s hidden behind the hype: tokenization can significantly expand the universe of investable assets beyond the listed stocks and bonds that dominate the markets today,” he added.
BlackRock already has the largest tokenized cash market fund at $2.8 billion, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), which launched in March 2024.
Regulators must allow TradFi, a tokenized marketplace, to operate together.
However, Fink and Goldstein said tokenization must proceed safely and with appropriate regulation, which requires policymakers and regulators to update rules to allow traditional and tokenized markets to work together.
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According to Fink and Goldstein, bond exchange-traded funds (ETFs) have followed a similar path as bonds, connecting dealer markets with public exchanges, allowing investors to trade more efficiently.
“And now, with spot Bitcoin ETFs, digital assets are also on traditional exchanges. Each of these innovations builds bridges. The same principles apply to tokenization,” they said.
“Regulators should aim for consistency. Risk should be judged based on what the risk is, not how it is packaged. A bond is still a bond, even if it exists on a blockchain.”
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