BlackRock Plans to Turn Traditional ETFs into Digital Tokens

Key Highlights

• Following the massive success of its Bitcoin ETF, BlackRock plans to introduce tokenized ETFs
• BlackRock CEO Larry Fink calls it the biggest innovation since the ETF itself
• However, there are some regulatory and other major challenges, such as security

The world’s largest asset manager, BlackRock, is pushing finance into the future with a major plan to convert traditional exchange-traded funds (ETFs) into digital tokens on the blockchain via tokenization.

JUST IN: BlackRock plans to tokenize ETFs following success with $BTC fund. pic.twitter.com/yQD0E4VjpX

— Whale Insider (@WhaleInsider) September 11, 2025

This plan comes after the massive success of its Bitcoin ETF. It could fundamentally change how people around the world invest, making it faster, cheaper, and accessible around the clock.

The news was first reported by Bloomberg on September 11. It shows BlackRock’s deepening commitment to merging traditional finance with digital assets. 

The firm aims to use blockchain technology to create tokenized versions of its popular ETFs. This would transform these investment funds into digital assets that can be traded instantly without the traditional delays and paperwork of the stock market.

This bold vision is led by BlackRock CEO Larry Fink, who has called tokenization the most revolutionary development in investing since the invention of the ETF itself. 

In his annual letter to investors, Fink predicted that tokenization could make buying a share of stock or a piece of a bond as simple as clicking a button. This could dramatically democratize access to investments that were once limited to large institutions.

This Decision Comes after the Success of BlackRock ETFs

BlackRock’s confidence comes from the unbelievable performance of its iShares Bitcoin Trust (IBIT), which has become the largest Bitcoin ETF in the world. Since its launch, IBIT has attracted billions of dollars from investors, with its crypto ETFs pulling in a staggering $3 billion in just the first quarter of 2025 alone.

The company has already proven the concept works with its tokenized money market fund, BUIDL. This fund, which holds safe, short-term government securities, has already grown to over $2 billion in value. This huge amount shows that institutional investors are comfortable with and eager for blockchain-based versions of traditional assets.

Why Tokenization is Good 

At its core, tokenization is about converting the ownership rights of a real-world asset, like a stock, a bond, or even real estate, into a digital token on a blockchain. This is not just a technical change. It’s a practical revolution.

For investors, it means transactions that settle in seconds instead of days. It means lower fees because it cuts out many of the middlemen. Most importantly, it means the market never closes. 

Imagine being able to trade an S&P 500 ETF on a weekend or at night, just like you can trade Bitcoin. That is the future BlackRock is building.

BlackRock is not alone in this race. Other major players like Galaxy Digital and Nasdaq are also exploring tokenized stocks, with Nasdaq having already filed for SEC approval to trade them. Brokerage app Robinhood is developing its own blockchain to offer tokenized U.S. securities to European customers.

Regulations and Critics

Critics, including some investor advocacy groups and traditional financial firms, point to major hurdles. The most pressing issue is digital identity: How do you reliably verify who owns a tokenized asset in a world of AI deepfakes and sophisticated cyberattacks? 

Experts say a foolproof “zero-trust framework” for identification is essential but incredibly difficult to build across different countries and legal systems.

There is also skepticism from parts of the crypto community itself. Some worry that by bringing ETFs onto the blockchain, giant firms like BlackRock are actually centralizing control over what was meant to be a decentralized system. 

BlackRock is actively engaged with regulators, particularly the SEC’s Crypto Task Force, to help shape the rules for this new landscape. Their discussions have focused on critical issues like how staking rewards might work for these tokens and what investor protections need to be in place.

The SEC has shown a willingness to modernize, with its “Project Crypto” initiative looking at moving U.S. markets to blockchain infrastructure. However, it remains cautious, determined to avoid the wild volatility and fraud that have plagued parts of the crypto world.

BlackRock’s ultimate goal is vast. Reports suggest the firm has a vision to eventually tokenize $10 trillion worth of assets, including not just stocks and ETFs, but also bonds, real estate, and private credit. If successful, it would be one of the largest transformations in the history of finance.