BlackRock, the largest asset manager globally, is exploring the tokenization of exchange-traded funds (ETFs) on the blockchain, inspired by the success of its spot Bitcoin ETFs. Reports from Bloomberg indicate that BlackRock is considering tokenizing funds linked to real-world assets (RWAs), although they may face regulatory challenges. With ETFs now outnumbering widely listed stocks, tokenization could enhance their trading capabilities and utility within decentralized finance (DeFi) applications. This interest isn't new for BlackRock, which already oversees the world's largest tokenized money market fund across multiple blockchains. Meanwhile, JPMorgan describes tokenization as a significant advancement for the $7 trillion money market fund space, noting initiatives involving Goldman Sachs and Bank of New York Mellon that BlackRock plans to join. The tokenized funds aim to provide more flexible collateral options and adapt to the increasing influence of stablecoins in the financial landscape. Despite the opportunities, experts caution that clearer regulations resulting from the US GENIUS Act will be necessary to sustain the growth of stablecoins and ensure robust investment environments.

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