BlackRock’s Blockchain Breakthrough: Tokenized ETFs & Real-World Asset Funds Set to Revolutionize Finance

Wall Street's $10 trillion titan just dropped a blockchain bombshell.

BlackRock is building tokenized ETFs and real-world asset funds on distributed ledgers—bypassing traditional settlement systems and slashing friction from legacy finance.

The move signals institutional adoption isn't coming—it's already here. Traditional finance rails creak under the weight of T+2 settlements and intermediary bottlenecks. Blockchain doesn't just streamline—it obliterates inefficiencies.

Expect resistance from middlemen who've built fortunes on friction. They'll call it risky—while quietly building their own nodes.

Tokenization doesn't just digitize assets—it rearchitects trust. Smart contracts replace custodians. Atomic settlements replace counterparty risk. The old guard's moat just got drained.

One cynical take? They're only doing it because clients demanded it—and the fee potential made their spreadsheets sing.

BlackRock uses JPMorgan’s Kinexys to test tokenized fund shares

The asset manager has already tested tokenized trades using JPMorgan’s Onyx, now known as Kinexys. Those trades were part of its larger trial of digital settlement infrastructure, a key piece of how tokenized assets WOULD move in real-time.

Larry Fink, the company’s chief executive, wrote in his 2025 annual letter to investors that “every financial asset can be tokenized”, repeating a view he’s expressed for years. And now, the company is pushing that idea deeper into public equity territory.

Tokenizing ETFs would allow trading to continue outside the U.S. market’s daily window, and potentially make them usable as collateral in crypto platforms.

The industry sees tokenized share classes as a stepping-stone to something much bigger: a full blockchain-based market where fractional shares and instant settlement are the norm.

The ecosystem is starting to expand. Exchanges like Kraken and Robinhood already offer tokenized stocks in international markets. Meanwhile, startups are piloting similar models under tight supervision. But moving ETFs to blockchain isn’t just about flipping a switch.

The existing market structure isn’t built for that. ETFs today clear through centralized clearinghouses like DTCC. Blockchain trades, on the other hand, settle instantly and never shut down. Reconciling those two systems raises legal and custodial questions regulators haven’t fully answered.

Trump administration supports controlled blockchain testing

Despite those problems, the environment has become more open. Under President Donald Trump, policymakers began supporting programs that let firms test blockchain-based markets in controlled settings.

That gave companies room to play with new tools without blowing up legacy systems. Now, with TRUMP back in the White House in 2025, that window for crypto-focused experimentation remains wide open.

The tokenized asset market is still tiny, about $28 billion, according to rwa.xyz, but the U.S. ETF market is worth trillions.

Meanwhile, Nasdaq has already asked regulators to approve trading of tokenized stock versions on its exchange, which, if approved, would be the first time blockchain infrastructure gets embedded into Core U.S. equity markets.

At the same time, McKinsey & Co. projects the market for tokenized real-world assets could hit $2 trillion by 2030. The biggest progress so far has come from tokenizing U.S. Treasuries, which are simpler to digitize.

Companies like Securitize and ONDO have already moved several billion dollars’ worth of Treasuries on-chain. Meanwhile, BlackRock and Citigroup are now digitizing entire funds to attract crypto-native capital and streamline operations.

But going after public equities is a bigger leap. Stocks come with real-time decisions like shareholder votes, dividends, splits, and mergers. That’s the real infrastructure of capitalism, and messing with it requires new tools, rules, and probably a lot of headaches.

BlackRock, though, is already trying to figure out how to plug it into blockchain. Let’s see how that works out in the long term.

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