Former crypto sceptic BlackRock CEO Larry Fink and chief operating officer Rob Goldstein say tokenization will act as a bridge between the crypto industry and traditional finance, doubling down on their support of the sector.
In an opinion article penned by Fink and Goldstein and published Monday in The Economist, the pair said that tokenization won’t replace the existing financial system any time soon, but predict it will help merge the two industries.
“Think of it instead as a bridge being built from both sides of a river, converging in the middle. On one side stand traditional institutions. On the other are digital-first innovators: stablecoin issuers, fintech’s and public blockchains,” the pair wrote.
“The two aren’t competing so much as learning to interoperate. In the future, people won’t keep stocks and bonds in one portfolio and crypto in another. Assets of all kinds could one day be bought, sold and held through a single digital wallet.”
BlackRock is the largest asset manager in the world, with over $13.4 trillion in assets under management. Its co-founder and CEO, Fink, was previously a crypto skeptic before he changed his mind.
Financial world can finally see benefits of tokenization
Fink and Goldstein said at first glance, it was hard for them to see the “big idea” because tokenization was tangled up in the crypto boom, which “often looked like speculation.”
“But in recent years traditional finance has seen what was hiding beneath the hype: tokenization can greatly expand the world of investable assets beyond the listed stocks and bonds that dominate markets today,” they added.
BlackRock already has the largest tokenized cash market fund, worth $2.8 billion. The BlackRock USD Institutional Digital Liquidity Fund, or BUIDL, launched in March 2024.
Regulators should allow TradFi, tokenized markets to work together
However, Fink and Goldstein also stated that tokenization must proceed safely, with appropriate regulations, which requires policymakers and regulators to update the rules to enable traditional and tokenized markets to work together.
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Bond exchange-traded funds (ETFs) followed a similar path for fixed income, connecting dealer markets with public exchanges, allowing investors to trade more efficiently, according to Fink and Goldstein.
“And now with spot Bitcoin ETFs, even digital assets are on traditional exchanges. Each of these innovations builds bridges. The same principle applies to tokenization,” they said.
“Regulators should aim for consistency: risk should be judged by what it is, not how it’s packaged. A bond is still a bond, even if it lives on a blockchain.”
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