BlackRock Goes Crypto-Courting: Secret SEC Talks on Tokenization & ETF Rule Overhaul

Wall Street’s $10 trillion gorilla just crashed the regulator’s party—again. BlackRock’s closed-door huddle with the SEC’s crypto task force spills two agenda bombshells: rewriting the rulebook for tokenized assets, and fast-tracking crypto ETP approvals. Guess those ’risky, speculative’ digital assets look mighty tasty now that custody tech’s caught up with the money train.

Insiders whisper the meeting had more tension than a Bitcoin options expiry—regulators grilled BlackRock’s army of suits on everything from chain fragmentation to stablecoin collateral. Meanwhile, the asset manager’s blockchain lead reportedly smirked while explaining how tokenized Treasuries could ’democratize finance’ (read: let them undercut every middleman from DTCC to your local ETF market-maker).

One cynical takeaway? When Jamie Dimon’s biggest frenemy starts demanding clearer crypto rules, it’s not about investor protection—it’s about locking down first-mover advantage before the 2025 bull run sends every pension fund scrambling for yield. The SEC’s response? A classic bureaucratic two-step: ’We’re carefully evaluating’ (translation: buy us more time while the political winds shift).

Product scope and regulatory ambitions

BlackRock also outlined its views on incorporating staking features into ETPs, aligning with other recent industry proposals reviewed by the SEC. 

Staking has become a central issue in ongoing discussions over whether proof-of-stake asset exposure within ETPs can be designed to meet regulatory expectations without compromising liquidity or investor protections.

The meeting also addressed tokenization, with BlackRock requesting feedback on how tokenization efforts could be structured within the existing securities framework. Tokenization is the process of representing traditional assets in the blockchain as digital tokens. 

The firm also suggested interim standards for crypto ETP issuers, asking the SEC to consider codified guidance that might apply ahead of broader rulemaking.

BlackRock additionally discussed criteria under Section 6(b) of the Exchange Act that could be used to evaluate whether a crypto ETP satisfies regulatory thresholds for exchange listing. These criteria include assessments of market integrity and investor safeguards.

Lastly, the meeting with the SEC Crypto Task Force covered options on crypto ETPs, with BlackRock raising technical questions about position and exercise limits. The firm requested clarity on how such limits could be structured regarding liquidity thresholds for the underlying crypto or ETP shares.