​BlackRock CEO calls tokenization useful for asset management industry

What’s new? Larry Fink, CEO of investment firm BlackRock, said in a letter to investors that the operational potential of tokenization could be beneficial to the asset management industry. In his view, tokenization of various assets has the potential to improve capital markets efficiency, benefit and accessibility for investors, and shorten value chains. Fink added that BlackRock continues to explore the digital asset ecosystem, especially the areas most relevant to clients, including stock tokenization and permissioned blockchains.

Information on the BlackRock website

What else did Fink report? The head of BlackRock noted that digital assets have become a widely discussed topic in the media over the past year, and the bankruptcy of FTX, one of the largest centralized exchanges, played a significant role in the rise in popularity of the topic. He also pointed to the media’s “obsession with Bitcoin,” adding that there are many other important developments in the industry.

For example, many emerging markets, including India, Brazil, and some countries in Africa, are seeing significant progress in digital payments, driving down costs and increasing access to financial services. Fink pointed out that in developed markets, such as the US, innovation has been slower and the cost of payments remains high.

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Fink said that even though the crypto industry is in its maturing, “there are clearly elevated risks and a need for regulation in this market.” He stressed that BlackRock plans to apply the same standards and controls to digital assets as the rest of the business.<

Fink also previously said that securities’ tokenization would be the next stage in the development of markets because it can provide “instantaneous settlement” and “reduced fees.”

In September 2022, BlackRock launched a blockchain exchange-traded fund in Europe, which includes crypto exchange Coinbase, investment firm Galaxy Digital, miner Marathon Digital, as well as PayPal, NVIDIA, and IBM. In the same month, BlackRock announced the launch of an exchange-traded fund with a focus on the metaverse. In early 2023, BlackRock added bitcoin to the Global Allocation Fund for ordinary and passive investors.