Once a crypto skeptic, BlackRock CEO Larry Fink and COO Rob Goldstein stated that tokenization will serve as a bridge between the crypto industry and traditional finance, further solidifying their support for the sector.
In a commentary written by Fink and Goldstein and published in The Economist on Monday, the two noted that tokenization will not replace the existing financial system in the short term, but they predict it will help integrate the two industries.
"Try to imagine it as a bridge being built simultaneously from both banks of a river, converging in the middle. On one side are traditional institutions, and on the other side are digital-first innovators: stablecoin issuers, fintech companies, and public blockchains," they wrote.
BlackRock is the world's largest asset management company, managing over $13.4 trillion in assets. Its co-founder and CEO Fink was previously a crypto skeptic but has since changed his view.
Fink and Goldstein stated that at first glance, they found it difficult to see the "grand vision" because tokenization is entangled with the crypto craze, and crypto "often looks like speculation."
"But in recent years, traditional finance has seen something hidden beneath the hype: tokenization can significantly expand the world of investable assets, beyond the publicly traded stocks and bonds that dominate the market today," they added.
BlackRock already has the largest tokenized cash market fund, with a size of $2.8 billion. The BlackRock U.S. Dollar Institutional Digital Liquidity Fund, abbreviated as BUIDL, is set to launch in March 2024.
However, Fink and Goldstein also stated that tokenization must advance safely under appropriate regulation, which requires policymakers and regulators to update rules to enable traditional markets and tokenized markets to work together.
According to Fink and Goldstein, bond exchange-traded funds (ETFs) have followed a similar path in the fixed income space, connecting the dealer market with public exchanges, allowing investors to trade more efficiently.
"Now, with the emergence of spot Bitcoin ETFs, even digital assets have landed on traditional exchanges. Every innovation builds a bridge. The same principle applies to tokenization," they said.
Related: Bitcoin (BTC) looks very different in mining 13 years after its first halving in 2025.
Original: “BlackRock Executives Say Tokenization Will Be a Bridge Connecting Crypto and Finance”
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