BlackRock, the world’s largest asset manager, is gearing up for a new blockchain initiative. After launching its tokenized fund backed by US Treasury bonds, the firm is now considering bringing its ETFs directly onto public blockchains, as reported by Bloomberg. This significant step could redefine how investors access financial markets.
From the success of BUIDL to the ambition of ETFs
The success of BlackRock with its BlackRock USD Institutional Digital Liquidity Fund (BUIDL) has been a game-changer. This fund, backed by short-term Treasury bills, repurchase agreements, and cash, quickly reached nearly $2.2 billion in assets under management, becoming the world’s largest tokenized product.
This success has prompted broader thinking: if Treasury bills can be tokenized, why not ETFs, those flagship products that attract trillions of dollars in global savings?
Tokenized ETFs: 24/7 trading and instant settlement
Currently, an ETF is confined to traditional exchange hours, and transactions still require up to two days to settle. With tokenization, everything changes.
An ETF on the blockchain could:
- Trade 24 hours a day, 7 days a week (sometimes 24/5), non-stop.
- Offer almost instant settlement, in minutes instead of two days.
- Grant access to ETFs to investors in markets where they are still inaccessible.
This promises speed, transparency, and financial inclusion.
The major hurdle: regulation
Despite excitement, BlackRock remains cautious. Reports suggest that deployment will hinge on regulatory approval. Financial authorities in the US and Europe will need to decide if ETFs can legally be issued and traded as tokens on public blockchains.
The question is crucial: allowing ETF tokenization would mean directly connecting traditional finance and decentralized finance (DeFi).
A strong signal for crypto markets
Whether the project materializes or not, the mere fact that BlackRock is exploring this avenue sends a clear message. Institutional finance is no longer content to watch blockchain; it aims to build its flagship products on it.
For the crypto market, this is a catalyst. Stablecoins and tokenized bonds have already proved their utility. If ETFs follow suit, they could trigger massive adoption. Will we see tokenized crypto ETFs in 2026?
