Tokenizing ETFs? BlackRock Aims to Make It a Reality in 2025

• Why Is BlackRock Betting Big on Tokenization?
• How Would Tokenized ETFs Actually Work?
• What’s Holding Back the Tokenization Wave?
• FAQs: Your Tokenized ETF Questions Answered

BlackRock, the world's largest asset manager, is doubling down on blockchain innovation by exploring the tokenization of ETFs. Following the explosive success of its bitcoin ETF (IBIT) and its Ethereum-based BUIDL fund, the firm is now eyeing a future where traditional securities like stocks and bonds exist as tokens. This move could revolutionize 24/7 trading, reduce settlement times, and democratize access to high-yield investments. But will regulators play along? Let’s dive into the details.

Why Is BlackRock Betting Big on Tokenization?

Larry Fink, BlackRock’s CEO, isn’t mincing words: In his 2025 annual letter, he declared that "every stock, every bond, every fund—every financial asset can be tokenized." The firm’s $86.3 billion IBIT ETF and $2.2 billion BUIDL fund (now live on Ethereum, Solana, and four other chains) prove blockchain’s viability for institutional assets. Tokenization slashes bureaucratic friction, enables instant settlements, and could unlock global markets where ETFs are currently hard to access. As Fink puts it, this isn’t just tech—it’s "democratizing yields."

How Would Tokenized ETFs Actually Work?

Imagine buying BlackRock’s S&P 500 ETF at 3 AM from Tokyo—with settlement in seconds. Traditional ETFs trade only during market hours, but tokenized versions on chains like Solana or Polygon would operate 24/7. Early adopters like Kraken and Robinhood already offer tokenized stocks in Europe, while Galaxy Digital tests Solana-based equity tokens (like its GLXY stock). Even Nasdaq is lobbying the SEC to approve tokenized securities trading. The infrastructure is falling into place.

What’s Holding Back the Tokenization Wave?

Regulation remains the elephant in the room. Though the SEC under crypto-friendly leadership has 72 crypto ETFs under review (including BlackRock’s), approval for tokenized traditional assets is uncharted territory. Proponents argue that blockchain’s transparency reduces risks like double-spending, but skeptics worry about market fragmentation. As one BTCC analyst noted, "The tech is ready—it’s about getting regulators comfortable with on-chain ownership laws."

FAQs: Your Tokenized ETF Questions Answered

What’s the difference between a crypto ETF and a tokenized ETF?

Crypto ETFs (like IBIT) track digital assets, while tokenized ETFs represent traditional securities (stocks/bonds) as blockchain tokens. Both use similar tech but target different asset classes.

Which blockchains support tokenized assets?

Ethereum dominates (thanks to BUIDL), but Solana, Polygon, and Avalanche are gaining traction for their speed and low fees. BlackRock’s multi-chain BUIDL expansion suggests interoperability will be key.

When could tokenized ETFs launch?

2025-2026 is the industry’s best guess. With Trump’s SEC chair pushing crypto innovation and BlackRock’s lobbying power, the pieces are aligning faster than expected.