BlackRock, the largest asset manager globally, is exploring the tokenization of exchange-traded funds (ETFs) on the blockchain, encouraged by the performance of its spot Bitcoin ETFs. The initiative may include tokenizing funds with exposure to real-world assets, although it must navigate regulatory challenges. ETFs, popular investment vehicles, currently outnumber publicly listed stocks. Tokenization could enable trading beyond standard hours and allow the use of ETFs as collateral in decentralized finance (DeFi). BlackRock manages the largest tokenized money market fund, with assets across multiple blockchains. JPMorgan views tokenization as a significant advancement for the $7 trillion money market fund industry and points to initiatives by firms like Goldman Sachs and Bank of New York Mellon. Tokenized money market funds are emerging amid pressures on traditional finance due to stablecoins’ rise and the liquidity shift into blockchain markets. Analysts suggest that tokenized funds could attract capital and bolster the role of cash as an asset against stablecoins' influence, enhancing their appeal as collateral.

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