BlackRock, the world’s largest asset manager, is actively exploring the tokenization of exchange-traded funds (ETFs) on public blockchains, according to recent reports.
This initiative builds on the firm’s successes with digital assets, including its spot Bitcoin ETF iShares Bitcoin Trust, or IBIT, which has amassed over $10 billion in assets under management since its 2024 launch, and its tokenized money market fund, BUIDL, which holds $2.2 billion as of September 2025 and operates on blockchains like Ethereum, Avalanche, and Polygon.
Tokenizing ETFs—particularly those tied to real-world assets (RWAs) such as stocks—would represent a significant expansion of BlackRock’s blockchain strategy, potentially transforming how these popular investment products are traded and accessed.
BlackRock is considering converting ETF shares into blockchain-based tokens. This would allow ETFs, which currently trade only during standard market hours (e.g., 9:30 AM to 4:00 PM ET on weekdays), to be available for 24/7 trading.
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Settlement times could shrink from the traditional two business days (T+2) to minutes via blockchain rails. Additionally, tokenized ETFs could enable fractional ownership, easier global access for investors in regions without traditional ETF availability, and use as collateral in decentralized finance applications.
The exploration is in early stages and hinges on regulatory approval from bodies like the U.S. Securities and Exchange Commission (SEC). No specific launch date has been announced, but BlackRock has already tested tokenized fund trades using JPMorgan’s Kinexys platform.
BlackRock CEO Larry Fink has long championed tokenization, stating in his 2025 investor letter that “every financial asset can be tokenized” to boost efficiency, reduce costs, and simplify institutional investing.
This aligns with industry trends, including Nasdaq’s recent SEC filing to trade tokenized stocks and ETFs, and the growing $7.4 billion market for tokenized money market funds excluding private credit. JPMorgan and other banks view tokenization as a counter to stablecoins’ rise, potentially unlocking trillions in RWAs.
Tokenized ETFs could democratize access, allowing seamless integration with crypto ecosystems and on-chain composability using ETF tokens in lending protocols. However, risks like smart contract vulnerabilities, regulatory uncertainty, and custody issues remain.
This could accelerate Wall Street’s blockchain adoption, bridging traditional finance (TradFi) and crypto. Analysts note it might enhance liquidity but question immediate value for retail investors, as platforms like Kraken and Robinhood already offer tokenized stocks.
Beyond regulation, hurdles include legal structures, interoperability across blockchains, and ensuring compliance with securities laws. BlackRock’s prior BUIDL success—launched in March 2024 and quickly becoming the largest tokenized fund—suggests feasibility, but scaling to ETFs is a bigger leap.
Tokenized ETFs could democratize access to sophisticated investment products, but they also introduce new dynamics in accessibility, utility, and risk. This could expand investor bases—BlackRock’s CEO Larry Fink envisions tokenizing “every financial asset” for broader participation—but requires education on blockchain basics to avoid pitfalls.
This initiative could accelerate the $7.4 billion tokenized money market sector (excluding private credit) into equities, fostering deeper integration between Wall Street and crypto ecosystems.
On-chain ETFs could enhance liquidity for RWAs like stocks, allowing seamless transfers across blockchains. JPMorgan views this as a “significant leap” for the $7 trillion money market industry, potentially countering stablecoin dominance by offering yield-bearing alternatives.
Tokenization enables “on-chain composability,” where ETFs integrate with DeFi apps for lending or derivatives, as seen in BlackRock’s tests with JPMorgan’s Kinexys platform. This might drive inflows similar to IBIT’s $6.9 billion in 2025, but scaled to BlackRock’s $10 trillion AUM vision.
In essence, it could transform ETFs—now outnumbering listed stocks per Morningstar—from passive vehicles into active DeFi primitives, though immediate retail impact may be limited.
Goldman Sachs’ tokenized funds and Franklin Templeton’s efforts, pressuring competitors (e.g., Vanguard) to innovate. X discussions emphasize this as a “bridge” for institutional adoption, reducing reliance on wrapped assets like WBTC.
This development underscores BlackRock’s pivot toward digital assets, following $6.9 billion in inflows to its Bitcoin ETF in 2025 alone. While not yet confirmed as a done deal, it signals a potential “digital makeover” for one of finance’s cornerstone products.