Key Takeaways：
- BlackRock CEO Larry Fink sees asset tokenization as the “next wave” for connecting traditional finance and digital-native investors.
- BlackRock already operates the leading tokenized money market fund, BUIDL, and is now exploring tokenized ETFs and proprietary tokenization technology.
- The broader real-world asset (RWA) tokenization market is growing fast but still grapples with liquidity, regulatory, and technical challenges.
- Recent regulatory moves (e.g. in the UK) and institutional shifts (e.g. Goldman Sachs, BNY Mellon) are accelerating the integration of tokenization in mainstream finance.
- For investors seeking new opportunities, tokenized instruments (especially money market funds, treasuries, and tokenized equities) present both upside potential and risks rooted in nascent infrastructure and legal ambiguity.
1. BlackRock’s Tokenization Vision: From ETFs to On-Chain Assets
In its recent earnings call, BlackRock (with over $13 trillion AUM) signaled a strategic pivot: the firm aims to deepen its involvement in tokenization as a means to bring traditional financial assets into the digital ecosystem.
CEO Larry Fink expects the current $4.5 trillion digital asset space to expand substantially in coming years, and he sees tokenization of ETFs, bonds, equities, and real estate as a bridge between crypto-savvy investors and core financial products.
Fink has hinted that BlackRock will make “exciting announcements” in the next few years regarding how the company can play a larger role in the tokenization and digitization of assets.
In practical terms, BlackRock is exploring ways to tokenize its iShares ETFs so that they can be held, transacted, and integrated into digital wallets — thereby reducing intermediation and friction.
BlackRock also stated that the firm’s teams are developing in-house tokenization technology and engaging industry partners to build out the necessary infrastructure.
2. BUIDL: BlackRock’s Flagship Tokenized Fund
BlackRock’s early foray into tokenization has been via the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), a tokenized money market fund issued in collaboration with Securitize.
As of mid-2025, BUIDL’s total digital assets under management is around $2.8 billion.
It supports multiple blockchains including Ethereum, Solana, and Avalanche.
In the tokenized U.S. Treasuries market, BUIDL captured a dominant share — around 33.9%, with $2.82 billion in holdings.
The BUIDL vehicle is also connected to liquidity pools that allow instantaneous exchange between BUIDL and stablecoins like USDC, making it more deployable within the digital finance ecosystem.
Although BlackRock’s digital-asset revenues are still modest (around $61 million in Q3), BUIDL serves as their strategic foothold in on-chain finance.
3. State of the Tokenization Market: Progress and Hurdles
3.1 Rapid Growth, But Still Early Days
Across the industry, the tokenization of real-world assets (RWAs) is gaining traction. Market participants report that tokenized assets surpassed $30 billion in 2025.
Some forecasts are even more aggressive: a BCG–Ripple report expects the tokenized asset market to surge from $0.6 trillion today to $18.9 trillion by 2033 (CAGR ~53%).
Mordor Intelligence places the 2025 tokenization market already above $2 trillion, with a projection to exceed $13 trillion by 2030.
Yet many analysts caution that much of this growth is potential rather than realized.
3.2 Use Cases and Innovation
Tokenized money market funds and open-end funds are among the most active applications, due to their liquidity and regulatory compatibility.
In the U.S., tokenized funds like FOBXX (Franklin Templeton), USYC (Circle/Hashnote), and BUIDL are notable examples.
Where tokenization shines is in enabling immediate settlement, programmable corporate actions, and better integration with crypto wallets — features difficult to replicate in traditional finance.
Experimental pilots by institutions like DTCC (with Chainlink) or J.P. Morgan’s Kinexys reflect growing efforts to bring settlement infrastructure on-chain.
On the equity front, tokenized stocks (stock tokens that mimic shares) are gaining popularity via firms like Gemini, Kraken, Coinbase, and Robinhood. The market reached $412 million by September 2025.
But tokenized equity offerings often resemble derivatives more than actual shares (e.g. lacking voting rights or dividends), attracting scrutiny over investor protection.
3.3 Liquidity, Regulation & Market Infrastructure Challenges
Despite enthusiasm, liquidity remains a major bottleneck in the RWA tokenization space. Many assets trade infrequently, have low address activity, and limited secondary market participation.
Structural barriers include limited standardized legal frameworks, whitelisting or permissioned access, custodial concentration, and off-chain dependencies.
In the U.S., regulatory clarity is still lacking. Tokenized securities often exist in grey areas under existing securities laws.
Elsewhere, regulators are starting to catch up. For example, the UK’s Financial Conduct Authority is proposing rules to permit tokenization of investment funds, including allowing tokenized money market funds as eligible collateral.
Institutional banks are also entering cautiously. Goldman Sachs and BNY Mellon are integrating tokenized money market offerings in closed systems, primarily for institutional clients.
The challenge is to balance innovation and investor protection. Crypto-native experiments (e.g. tokenized stocks trading 24/7) raise regulatory red flags in traditional finance circles.
Academic proposals — such as two-tier token architectures (element + composite tokens) — aim to enhance liquidity and flexibility in complex asset tokenization.
4. Strategic Implications for Crypto Investors
If you are looking for emerging opportunities in crypto and digital finance, here are some strategic takeaways:
4.1 Know Where Tokenization Has Traction
- Tokenized money market funds (MMFs) are currently the most robust segment, with relative regulatory alignment and utility in the digital ecosystem.
- Tokenized treasuries and short-term government debt are gaining ground as safe, liquid RWA exposures.
- Tokenized equities offer speculative upside but come with regulatory ambiguity and structural risk.
4.2 Assess Liquidity and Market Depth
Because many tokenized assets are thinly traded, liquidity risk is higher than with traditional instruments. Check on-chain metrics: transfer volume, active addresses, pool depth, and redemption mechanisms.
4.3 Watch Infrastructure and Regulatory Moves
Invest in or monitor platforms that provide tokenization infrastructure — for instance, Securitize, which manages major token offerings (including BUIDL).
Regulatory changes, such as UK’s push for tokenized funds, may unlock wider adoption and reduce friction.
4.4 Consider Hybrid Strategies
Because tokenization is still nascent, combining tokenized exposure with traditional holdings may balance upside and risk. Use tokenized funds to experiment and gain on-chain literacy, but avoid concentration in any single novel tokenized product.
5. Recent Highlights & New Developments
- The RWA tokenization market has reached record highs (~$33.84 billion), with private credit as the largest share and tokenized treasuries as a significant segment.
- Tokenized stocks are scaling rapidly; over $688 million is tied up in tokenized equities as of October 2025.
- UK regulatory proposals may allow direct-to-fund payments and public blockchain usage for tokenized funds.
- Goldman Sachs & BNY Mellon are integrating tokenized money market funds into institutional tools.
- BlackRock-led consortium has struck a $40 billion AI infrastructure deal (not directly in crypto but underscores the firm’s broader strategic footprint).
- Liquidity and tradability gaps remain a focus of academic scrutiny and innovation in market design.
Conclusion
BlackRock’s public commitment to expand in the tokenization domain marks an important juncture in the convergence of traditional finance and crypto-native architectures. The firm’s operational anchor — BUIDL — offers a hands-on example of tokenized money markets, and its push toward tokenized ETFs and internal technology reflects a longer-term vision.
Yet this is still early innings. Market growth is promising, but persistent challenges around liquidity, legal clarity, and infrastructure must be addressed to unlock the full potential of tokenized assets. For crypto-savvy investors or teams considering new yields or exposure, tokenization presents both a frontier and a testing ground: one where well-informed experimentation, risk control, and regulatory navigation will matter more than pure hype.
