BlackRock, a leader in asset management, foresees a transition of traditional financial assets to tokenized forms over the coming decades, as stated by CEO Larry Fink.
In an interview with CNBC’s Squawk on the Street on Tuesday, Fink asserted that the tokenization of all assets represents a significant future direction for the firm and an opportunity to engage more investors.
“If we manage to tokenize an ETF and digitize it, we can attract new investors who are just starting in markets through crypto; they are investing, but now we can introduce them to more conventional long-term retirement products,” he explained.
“We view this as the next wave of opportunity for BlackRock over the next several years, transitioning away from traditional financial assets by digitizing them and keeping people within that digital ecosystem.”
As the world’s largest asset manager, BlackRock reported $13.5 trillion in assets under management in its earnings report on Tuesday. The company holds $104 billion in crypto assets, which accounts for about 1% of its total portfolio.
Tokenization is still in its early stages
Fink also mentioned to CNBC that he perceives asset tokenization as still nascent, with vast potential across various sectors.
“I truly believe we are just at the start of asset tokenization, encompassing everything from real estate to equities and bonds. It spans the entirety,” he remarked.
The asset tokenization market is projected to exceed $2 trillion by 2025, according to Mordor Intelligence, with significant growth expected in the coming years, predicted to surpass $13 trillion by 2030.
Fink also disclosed during the fund managers’ earnings call that BlackRock intends to increase its involvement in tokenization, with teams throughout the company actively exploring prospects.
The firm currently operates the largest tokenized cash market fund, valued at $2.8 billion, known as the BlackRock USD Institutional Digital Liquidity Fund, or BUIDL, launched in March 2024.
Related: BlackRock CEO seeks expedited SEC approval for bond and stock tokenization: Implications for crypto
Fink’s evolving perspective on crypto
Earlier this week, in an interview with CBS’s 60 Minutes, Fink stated that he believes crypto plays an essential role in a diversified investment portfolio, akin to gold.
“Crypto has a role similar to gold; it serves as an alternative. For those aiming to diversify, this isn’t a bad asset, but I don’t think it should dominate your portfolio.”
Previously, he was a prominent crypto critic, labeling it a money laundering index in 2017 and reinforcing his stance in 2018 by claiming none of his clients wanted to invest in it.
During his CNBC interview, Fink acknowledged his past skepticism but explained that his views evolved because “I grow and learn.”
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