BlackRock explores tokenizing exchange-traded fund (ETF) shares as part of its push to expand its digital asset infrastructure beyond traditional market boundaries.
As Bloomberg News reported on Sept. 11, the firm weighs creating blockchain-based versions of ETFs tied to real-world assets (RWA), including stocks, according to sources familiar with the confidential planning.
Tokenized ETF shares would enable trading beyond Wall Street’s standard hours, improve international access to US products, and create new collateral opportunities within crypto networks.
The report comes in the same week as Nasdaq filed with the SEC to trade tokenized stocks and ETFs on its platform.
BlackRock has tested tokenized fund shares through JPMorgan’s Kinexys infrastructure and positioned itself as an early adopter of digital settlement models.
Money-market funds from Franklin Templeton and BlackRock opened the pathway for the largest tokenization efforts. Excluding private credit, tokenized money funds are the largest RWA category, with a $7.4 billion market cap as of Sept. 11.
At the same time, ETFs offer broader asset exposure and trading mechanics that are well-suited for blockchain deployment. Exchanges including Kraken, Robinhood, and Coinbase already offer tokenized stocks internationally or plan to do so.
However, the report noted that current challenges include reconciling ETF settlement through Wall Street clearinghouses with blockchain’s instant, 24-hour trading capabilities. These challenges create technical and regulatory questions for custodians managing the transition between traditional and digital infrastructure.
BlackRock’s exploration reflects mainstream finance’s evaluation of blockchain technology for enhancing market infrastructure, including improvements in collateral flows and settlement speed.
The firm’s digital asset advocacy, combined with regulatory shifts, positions tokenized ETFs as another bridge between traditional and decentralized finance systems.
