BlackRock plans to tokenize ETFs: A major step into blockchain

Tokenization trend grows as BlackRock plans to tokenize ETFs

BlackRock is looking at a big change: the firm is weighing whether to put some exchange-traded funds (ETFs) on public blockchains. This idea follows the firm's recent moves into digital funds and tokenized money-market products. The plan is still being discussed inside the company and nothing is final yet.

Source : Bloomberg

Why Does it Mean?

Tokenization turns a fund share into a digital token on a blockchain. That can allow trading outside usual market hours, faster settlement, and smaller pieces of an asset for more people to buy. Supporters say token based ETFs could help international investors access U.S. products and let shares be used inside crypto networks in new ways.

What BlackRock Already Does in Tokenization

The company has experience in tokenization. It already runs a token-like money market fund called BUIDL (BlackRock USD Institutional Digital Liquidity Fund). That fund has over US$2.2 billion in assets. It works across blockchains such as Ethereum, Polygon, Aptos, and others.

Why BlackRock considers this move

There are a few reasons:

• 24/7 Trading – A tokenized ETF could allow trading at any time (weekends, nights), not just when markets are open.

• Faster Settlements – Blockchain could help settle trades much faster than traditional systems that take days.

• Access & Fractional Ownership – More people around the world could invest in parts of ETFs. They could own fractions of shares. This lowers the cost of entry.

• Real-World Assets (RWA) on Blockchain – BlackRock is looking into tokenizing funds tied to real assets, not just crypto or stablecoins.

BlackRock’s recent steps

BlackRock’s move comes after its success with spot Bitcoin products and with tokenized fund experiments. The firm has previously tested tokenized share classes and a token like money-market fund that drew attention for its size. Company leaders have long said tokenization could reshape finance if regulators allow it.

Risks and roadblocks

There are big challenges.Tokenized real-world assets so far have shown low secondary trading outside crypto natives, which raises questions about liquidity and market depth. The wider industry—exchanges, banks, and regulators—is still working out standards.

How this ties to wider industry moves

The idea of tokenized securities is gaining momentum. Nasdaq has filed with regulators to allow trading of coin based securities on its market, signaling that exchanges and big institutions are preparing infrastructure for token based assets. Other large banks and asset managers are also experimenting, which could make ETFs part of a broader shift in finance.

Final note

BlackRock plans to tokenize ETFs, offering 24/7 trading as one likely benefit if the idea moves ahead. For now, the company is studying the plan and talking with partners. Investors and the public should watch the next steps and official announcements.