Asset tokenization is becoming one of the key areas of development in the global financial market. Larry Fink, CEO of BlackRock, views blockchain as a technology capable of changing the principles of securities ownership, investment fund management, and financial settlement processes. Under his leadership, the world's largest asset management company has begun issuing tokenized investment products, combining traditional financial instruments with blockchain infrastructure.
However, BlackRock has not moved all its investment portfolios to the blockchain. The company is gradually implementing the technology in selected funds and investment products. Its strategy is to create an infrastructure in which stocks, bonds, and other assets can be transferred more quickly, with lower operating costs and more flexible settlement mechanisms.
Why Larry Fink Has Focused on Asset Tokenization
Larry Fink has repeatedly described tokenization as one of the promising areas for modernizing the financial system. In BlackRock's 2025 letter to shareholders, he emphasized that virtually any financial asset could potentially have a digital representation on the blockchain.
Today, most securities already exist in electronic form. However, transactions involving them still require the participation of brokers, custodians, clearing organizations, and banks. Each institution maintains its own records, while the transfer of ownership rights involves data verification and reconciliation procedures.
As a result, there is a time gap between the execution of a trade and its final settlement. For example, the US stock market operates under the T+1 settlement standard, according to which most securities transactions are settled on the next business day.
Tokenization could potentially change this model. An investment asset or the rights associated with it are represented by a digital token, with information about the token recorded on a distributed ledger. The transfer of such a token between authorized participants can take place around the clock, regardless of standard stock exchange operating hours.
For BlackRock, the technology is attractive for several reasons:
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reducing settlement times for investment transactions;
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automating the recording and transfer of asset ownership rights;
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reducing costs associated with certain intermediary processes;
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improving the efficiency of liquidity management;
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creating new channels for accessing investment products.
However, blockchain alone does not guarantee instant settlement. This requires compatible payment mechanisms, a legally recognized system for recording ownership rights, and appropriate asset custody infrastructure.
How BlackRock Launched Its First Tokenized Investment Fund
The practical implementation of the strategy began in March 2024, when BlackRock introduced the BlackRock USD Institutional Digital Liquidity Fund under the ticker BUIDL. It was the company's first tokenized fund launched on the public Ethereum blockchain.
The project's technology partner was Securitize, a company that provides infrastructure for issuing and servicing digital securities.
BUIDL is fundamentally different from cryptocurrency funds that invest in Bitcoin or Ethereum. Its assets consist of traditional financial instruments: cash, short-term US Treasury obligations, and repurchase agreements.
The main innovation concerns the way investment interests are recorded. Investors' rights are represented by tokens that can be transferred between pre-approved digital wallets.
The fund aims to maintain the value of each token at one US dollar, while investment income is distributed in the form of additional tokens.
Unlike traditional infrastructure, where the transfer of investment interests depends on established procedures, BUIDL tokens can be transferred between authorized participants around the clock.
In March 2025, BUIDL's assets under management exceeded one billion dollars. This result became an important confirmation of institutional interest in tokenized financial instruments.
At the same time, the fund remains a regulated investment product. The use of blockchain does not eliminate requirements concerning investor eligibility, customer verification, and compliance with securities laws.
Why BlackRock Is Tokenizing US Treasury Bonds
The decision to select short-term government obligations for its first tokenized fund was a strategic one.
US Treasury bonds are widely used by financial institutions for liquidity management. They have a well-developed market, relatively predictable characteristics, and strong demand among institutional investors.
For BlackRock, tokenizing these instruments provides an opportunity to test the effectiveness of blockchain without having to link the project's results to the high volatility of cryptocurrencies.
Of particular interest is the possibility of using tokenized fund interests as collateral for financial transactions.
In the traditional system, transferring collateral between institutions may require the involvement of several intermediaries and additional settlement procedures. A tokenized instrument could potentially enable faster transfers of rights if the relevant infrastructure supports such transactions.
For example, an institutional participant may hold interests in a money market fund, receive investment income, and simultaneously use those interests as collateral for certain obligations.
This increases the functionality of the asset: it becomes not only an instrument for allocating capital but also a potential component of settlement infrastructure.
However, the use of tokens as collateral depends on the rules of the specific platform, custody arrangements, risk assessment, and legal recognition of the relevant rights.
How Tokenization Is Changing Investment Portfolio Management
For asset management companies, blockchain is primarily attractive because of its potential to optimize asset-related operations.
The traditional portfolio management system involves constant interaction between various recordkeeping and settlement institutions. When securities are purchased, sold, or transferred, data is updated across several independent systems.
Tokenization makes it possible to create a coordinated digital infrastructure in which information about asset transfers is recorded on the blockchain.
One potential advantage is the reduction of operational delays. If settlements are completed faster, market participants need to hold capital for shorter periods to meet their transaction obligations.
Another area is automation. Smart contracts make it possible to execute predefined operations when specified conditions are met. Depending on the structure of the investment product, these may include income distribution, verification of authorized addresses, or the execution of certain settlement actions.
Transparency of recordkeeping is another important factor. Blockchain makes it possible to track the sequence of transactions, although the availability of information depends on the network used and the product's architecture.
For BlackRock, these capabilities are particularly important because of the scale of its business. Even a relatively small reduction in the costs of servicing investment transactions could potentially generate significant economic benefits.
At the same time, tokenization does not mean the complete elimination of intermediaries. Asset management companies, custodians, auditors, and registrars continue to perform necessary functions, but some of their interactions may move to a new technological foundation.
Why BlackRock Is Expanding Tokenization to Other Funds
Following the launch of BUIDL, the company continued developing its digital investment instruments business.
In August 2026, BlackRock announced the launch of tokenized share classes for selected European money market funds within the BlackRock Institutional Cash Series.
The project uses the Kinexys by J.P. Morgan infrastructure. The tokens are issued on the Ethereum network and represent rights to the corresponding interests in investment funds.
The distinctive feature of this model is that BlackRock tokenizes shares of existing regulated products rather than creating completely independent cryptocurrency instruments.
This demonstrates the company's fundamental approach: blockchain should be integrated into the traditional financial system while preserving the legal structure of investment products.
Tokenized fund shares can be used for more flexible asset transfers between authorized participants and could potentially be applied in digital collateral management mechanisms.
This format is particularly attractive to banks, investment companies, and corporate treasury departments that require instruments for short-term cash allocation and efficient liquidity management.
How Tokenization Could Change Investors' Access to Financial Markets
Larry Fink views tokenization not only as a way to optimize the internal processes of financial institutions but also as an opportunity to expand the investor base.
Today, users of cryptocurrency wallets and traditional brokerage platforms often operate within different financial systems. Purchasing stocks or investment funds requires specialized infrastructure that is not always compatible with digital assets.
Tokenization could potentially bring these areas together.
If regulated investment products become accessible through compatible digital platforms, users will be able to interact with traditional assets within a familiar blockchain environment.
For BlackRock, this means an opportunity to distribute investment products through new channels.
Another promising area is fractional ownership. Tokenization technically makes it possible to divide investment rights into smaller portions, potentially reducing technological barriers to participation in certain investment products.
However, accessibility is determined by more than technology alone. Minimum investment amounts, investor eligibility requirements, and legal restrictions remain in effect.
Therefore, broader access to tokenized assets will depend on regulatory developments and the emergence of financial platforms capable of serving different categories of investors.
What Risks Remain When Using Blockchain
Despite its technological advantages, tokenization does not eliminate investment and operational risks.
First of all, it is necessary to distinguish between owning a token and legally owning the underlying asset. Depending on the product's structure, a digital token may represent an interest in an investment fund, a claim, or another property right.
Therefore, the issuer's documentation, token transfer rules, and investor protection mechanisms are of critical importance.
Technological security is another concern. Smart contract errors, compromised cryptographic keys, and failures in digital infrastructure can lead to financial losses or temporary inaccessibility of assets.
There remains a risk of insufficient liquidity. Even if a token can be transferred around the clock, this does not guarantee that an investor will be able to sell the token at the right moment at a fair market price.
In addition, different blockchain networks use their own technical standards. Widespread circulation of tokenized financial instruments will require platform interoperability and reliable cross-system operations.
This is precisely why BlackRock is developing tokenization within a regulated financial infrastructure that includes participant identification, transaction monitoring, and compliance with legal requirements.
What Larry Fink's Strategy Means for the Future of the Financial System
BlackRock's interest in tokenization has implications far beyond a single investment fund.
The company manages assets for institutional and individual investors and works with major banks, custodians, and financial platforms. Therefore, introducing blockchain into its products contributes to the development of infrastructure that could potentially be used by other market participants.
In the long term, tokenization could change the mechanisms for issuing bonds, transferring investment fund interests, transferring collateral, and settling transactions.
However, widespread adoption will not happen overnight. Financial institutions need to harmonize recordkeeping standards, ensure legal protection for token holders, and establish compatible payment systems.
Larry Fink's strategy is not about replacing traditional finance with cryptocurrencies but about modernizing the existing investment infrastructure.
BlackRock has already demonstrated the practical application of this model through BUIDL and the tokenized share classes of other funds. Further development will depend on the extent to which blockchain can deliver real economic benefits: faster settlements, more efficient use of capital, and lower operating costs.
It is these factors, rather than the mere adoption of a new technology, that will determine whether tokenization becomes a standard in the global investment market.
