Quick Breakdown
- BlackRock is exploring tokenized ETFs after its Bitcoin ETF and BUIDL fund successes.
- Tokenized ETFs could expand access to markets and enable new collateral uses.
- Regulatory and settlement challenges remain as tokenized finance gains traction.
BlackRock expands blockchain push
BlackRock is considering tokenizing exchange-traded funds (ETFs) as part of its growing foray into blockchain-based finance. The move, reported by Bloomberg on September 11, comes on the heels of its successful spot Bitcoin ETF and its tokenized money market fund, BUIDL.
Tokenized ETFs would give investors the ability to trade beyond Wall Street’s limited hours, open up easier access to global markets, and create new opportunities to use ETF shares as collateral in digital asset ecosystems.
Building on BUIDL and Bitcoin ETF momentum
BlackRock has already established a track record in tokenized products. Since launching in March 2024, its BUIDL fund has attracted over $2 billion in assets, while the iShares Bitcoin Trust exceeded $10 billion in under a year, making it one of the fastest-growing Bitcoin ETFs.
CEO Larry Fink reinforced the company’s direction in his 2025 investor letter, stressing that tokenization represents the future of finance. “Every financial asset can be tokenized,” he wrote, highlighting the benefits of faster settlement and efficiency.
The firm has also tested blockchain-based settlement through trades on JPMorgan’s Onyx platform, now renamed Kinexys.
Regulatory and market challenges ahead
Despite the enthusiasm, tokenized ETFs still face hurdles. Traditional ETFs rely on clearinghouses for settlement, while blockchain-based assets move instantly and around the clock. Reconciling these two systems remains a major issue for regulators, custodians, and exchanges.
The regulatory climate may, however, be shifting. Under the Trump administration, U.S. policymakers have shown openness to sandbox-style programs to test blockchain-powered markets. Nasdaq has already filed with the Securities and Exchange Commission (SEC) to allow tokenized stocks to trade on its exchange, potentially setting a precedent.
Growing competition in tokenized finance
BlackRock is not alone in this race. Rivals like Franklin Templeton and Fidelity are developing their own tokenized funds, while platforms such as Kraken and Robinhood have rolled out tokenized equities in overseas markets.
Even with growing adoption, the sector remains nascent. Tokenized assets currently total around $29 billion, according to rwa.xyz dwarfed by the $8 trillion U.S. ETF industry.
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