BlackRock, a leader in asset management, anticipates a transition from traditional financial assets to their tokenized counterparts in the coming decades, as stated by CEO Larry Fink.
In an interview with CNBC’s Squawk on the Street on Tuesday, Fink expressed that he views the tokenization of all assets as the next significant step for his company and an excellent opportunity to attract new investors.
“By tokenizing an ETF, digitizing that ETF, we can engage new investors who are just starting in markets through crypto. They may be investing now, but we can guide them towards traditional long-term retirement products,” he remarked.
“We see this as the next wave of opportunity for BlackRock over the upcoming years, as we begin to move away from traditional financial assets by reintroducing them in a digital format, allowing people to remain within that digital ecosystem.”
BlackRock stands as the world’s largest asset manager, managing $13.5 trillion in assets as reported in its recent earnings announcement. The firm has $104 billion in crypto assets, making up about 1% of its total portfolio.
Still early days for tokenization
Fink also mentioned to CNBC that asset tokenization is still in its early stages, with substantial growth potential across various sectors.
“I believe we are just at the initial phase of asset tokenization, spanning real estate, equities, and bonds. It encompasses all areas,” he noted.
The asset tokenization sector is projected to exceed $2 trillion by 2025, according to Mordor Intelligence, with expectations to surge beyond $13 trillion by 2030.
Fink also revealed during the fund managers’ earnings call that BlackRock intends to expand its role in tokenization, with teams exploring various options across the company.
Furthermore, BlackRock operates the largest tokenized cash market fund, valued at $2.8 billion, known as the BlackRock USD Institutional Digital Liquidity Fund, or BUIDL, which launched in March 2024.
Related: BlackRock CEO urges SEC to ‘quickly approve’ tokenization of bonds, stocks: Implications for crypto
BlackRock’s Fink has changed his tune on crypto
This week, in an interview with CBS’s 60 Minutes, Fink also expressed that he believes crypto has a crucial role in a diversified investment portfolio, akin to gold.
“Crypto serves a purpose much like gold does; it’s an alternative. For those looking to diversify, it can be a valuable asset, but I don’t think it should dominate your portfolio.”
He previously held a skeptical view towards crypto, labeling it as an indicator of money laundering in 2017, and reiterated in 2018 that none of his clients were interested in the market.
Fink stated in his CNBC interview that he was once a critic, but his perspective evolved because “I grow and learn.”
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