Former crypto skeptic BlackRock CEO Larry Fink and chief operating officer Rob Goldstein believe tokenization will serve as a crucial bridge between the cryptocurrency industry and traditional finance, reinforcing their ongoing support for the sector.
In an opinion article published in The Economist, Fink and Goldstein stated that while tokenization is unlikely to replace the existing financial system in the immediate future, it is poised to facilitate the integration of these 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 executives 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, the world's largest asset manager with over $13.4 trillion in assets under management, saw its CEO, Fink, transition from a crypto skeptic to an advocate after initially having reservations.
The Financial World Embraces Tokenization's Benefits
Fink and Goldstein initially found it challenging to grasp the full potential of tokenization, as it was closely associated with the crypto boom, which often appeared speculative.
"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 explained.
BlackRock has already established the largest tokenized cash market fund, the BlackRock USD Institutional Digital Liquidity Fund, or BUIDL, which was launched in March 2024 and is valued at $2.8 billion.
Regulatory Support for Integrated Tokenized Markets
Fink and Goldstein emphasized the importance of safe implementation for tokenization, requiring appropriate regulations. They called for policymakers and regulators to update existing rules to enable seamless collaboration between traditional and tokenized markets.
The executives drew a parallel to the evolution of bond exchange-traded funds (ETFs), which enhanced fixed income trading by connecting dealer markets with public exchanges for greater investor efficiency.
"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 noted.
"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."