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Is the era of all-weather trading coming? Blackrock explores tokenization of ETFs
Blackrock, the world's largest asset management company, is exploring the possibility of converting exchange-traded funds (ETFs) into blockchain tokens, a move that could completely transform the way one of Wall Street's most important investment products operates.
On September 12th, Bloomberg reported that informed sources revealed that the company is studying how to tokenize funds linked to real-world assets such as stocks. Blackrock has had a successful precedent in the field of digital assets before.
The tokenized money market fund BUIDL, launched by the company in 2024, has grown to over 2 billion US dollars and is quite popular on cryptocurrency platforms. In addition, the launch of its spot Bitcoin ETF was also a huge success and quickly became one of the most popular such funds in history.
It is reported that the tokenization of ETFs may bring about changes such as extended trading hours beyond the regular hours of Wall Street, easier access to US products for overseas investors, and new uses as collateral in crypto networks.
Analysis indicates that this innovation is attracting the attention of the entire industry and is regarded as a significant step in the market's migration towards blockchain. Blackrock's exploration highlights the trend of mainstream financial institutions beginning to test blockchain technology to transform market infrastructure.
The core advantages of tokenization technology
Tokenization involves creating digital versions of traditional assets to enable them to flow on blockchain systems. For ETFs, this technology may enable 24-hour trading, breaking the restrictions of fixed trading hours on Wall Street.
In addition, tokenization can also make American financial products more accessible to overseas investors and create potential new uses as collateral in the crypto network.
Supporters believe that the migration to blockchain can enable functions such as instant settlement and share splitting. Money market funds have paved the way for this transformation, and flexibly designed ETFs may serve as a testing ground for this transition.
Blackrock has always been an active promoter of digital assets. In addition to the BUIDL fund, the company has also tested tokenized fund share trading on jpmorgan Chase's Onyx (now known as Kinexys) infrastructure and positioned itself as an early adopter of digital settlement models.
Blackrock CEO Larry Fink emphasized the company's optimistic stance, stating that every financial asset can be tokenized and reiterating this view in the 2025 annual letter to investors. This statement further highlights BlackRock's confidence in how blockchain technology will transform the financial market.
Interest in tokenization within the industry is on the rise. Money market funds from companies such as Franklin Templeton and BlackRock have paved the way for this, and ETFs, as relatively flexible investment tools already designed, may become the testing ground for this transformation.
Exchanges such as Kraken and Robinhood have already offered tokenized stocks overseas, and start-ups are also piloting similar services in a controlled environment.
Facing settlement system and regulatory challenges
It is reported that this transformation faces major obstacles. Currently, ETFs are settled through the Wall Street Clearing House, while the tokens traded on the blockchain are instantly and around the clock liquid. Coordinating these systems has brought problems to regulatory agencies and custodians.
However, the regulatory environment is becoming more lenient. During the Trump era, policymakers were open to projects that allowed companies to test blockchain-based markets in controlled environments.
Meanwhile, Nasdaq has asked regulators to allow investors to trade tokenized versions of its stocks on its exchange, which may mark the first major test of blockchain technology at the core of the US stock market.
According to a previous article by Jianwen, the CEO of Nasdaq has recently publicly stated that Nasdaq will move towards tokenization of stocks, directly embedding blockchain technology into the core securities trading system, rather than being limited to over-the-counter or affiliated markets. Trading hours will gradually move towards five days a week, 24 hours a day, or even seven days a day in the future.
Analysts point out that although the market size of tokenized assets is still relatively small, BlackRock's exploration indicates that mainstream finance is beginning to test whether blockchain can rebuild the market infrastructure, and fundamental changes may occur from collateral flow to settlement speed.
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