BlackRock is considering integrating exchange-traded funds (ETFs) into public blockchains, as reported by Bloomberg. This initiative would involve tokenizing funds linked to traditional assets like stocks, yet its implementation hinges on regulatory approvals.
Key Points:
- BlackRock’s potential tokenized ETFs follow its recent success with a $2.2 billion tokenized money market fund.
- The adoption of tokenized ETFs could facilitate rapid settlements, enable 24/7 trading, and provide global investors with greater access.
The discussions occur after last year’s debut of the BlackRock USD Institutional Digital Liquidity Fund, which has become the largest tokenized Treasury product globally. Tokenization aims to change how shares of these funds operate, allowing them to be traded as tokens on blockchain networks, unlike conventional stock exchange trading, which is restricted to market hours.
Supporters emphasize that such innovations could significantly reduce settlement times from two days to mere minutes and enhance accessibility for investors in regions lacking easy access to ETFs. However, these developments are subject to regulatory scrutiny, highlighting a broader trend in finance where various entities are exploring blockchain solutions for diverse financial products.
