BLK Pushes Deeper Into Digital Assets With Plans to Tokenize ETFs

BlackRock Inc. BLK is exploring plans to launch tokenized exchange-traded funds (ETFs) on blockchain networks. The asset manager is assessing how to tokenize ETFs while ensuring their values remain tied to underlying traditional assets such as stocks. This was first reported by Bloomberg, citing people familiar with the matter.

Through tokenization, traditional financial assets are converted into digital tokens on a blockchain. For ETFs, this means creating blockchain-based versions of the funds that represent ownership of the underlying assets.

BlackRock’s Rationale Behind the Potential Move

Digitizing ETFs can enable trading beyond standard hours, expand access for international investors and create opportunities to use ETF shares as collateral in decentralized finance networks. Tokenization also allows fractional ownership, letting investors acquire smaller portions of assets. These benefits, along with faster settlements and more efficient market structures, have driven growing adoption across the financial industry. BlackRock’s competitor, Franklin Templeton, has already introduced tokenized share classes of money market funds.

BlackRock has consistently positioned itself as an early mover in the tokenization space. It previously experimented with tokenized fund shares on JPMorgan’s Onyx blockchain (now called Kinexys). CEO Larry Fink has frequently stated that he believes all financial assets could eventually be tokenized.

Given the rapid adoption and the vast size of opportunity for tokenized real-world assets, this offers a great revenue-generating stream to BlackRock with higher fees and a wider client base. However, despite the optimism, major obstacles persist. Traditional ETFs settle through Wall Street clearinghouses, while tokenized assets settle instantly, creating regulatory and custodial hurdles.

The move comes after BlackRock’s earlier ventures into digital assets. Its tokenized money-market fund, BUIDL, introduced in 2024, now manages more than $2 billion and has gained momentum on crypto platforms. It was launched shortly after the firm introduced its spot Bitcoin ETF, one of the most successful funds of its kind.

In the second quarter of 2025, BlackRock’s assets under management (AUM) grew 17.7% year over year to a record $12.53 trillion, driven in part by a 329.3% surge in digital assets. The firm’s focus on digital assets was further highlighted by a recent $116 million investment from The Harvard Management Company in BlackRock’s iShares Bitcoin Trust.

Other Efforts by BlackRock to Grow AUM

BlackRock has been engaged in efforts to grow its AUM. Last week, KUNA, a Kuwaiti state news agency, reported that the company is set to open an office in the country to deliver investment advisory services.

Earlier this month, BLK and Citigroup Inc. C announced a new customized portfolio offering for its global wealth clients, managing approximately $80 billion in assets. The offering, Citigroup Portfolio Solutions powered by BlackRock, is expected to be launched in the fourth quarter of 2025.

Earlier this month, it acquired ElmTree Funds, while in July 2025, it purchased HPS Investment Partners to deepen its private market offerings. In March 2025, it acquired Preqin for $3.2 billion to enhance its private markets offerings.

BLK’s Price Performance & Zacks Rank

Over the past year, BLK shares have gained 25.5%, outperforming the industry’s 15.7% growth.

Currently, BlackRock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Efforts by Another Financial Firm to Expand into Digital Assets

Earlier this month, U.S. Bancorp USB resumed its bitcoin custody service following a three-year pause. Easing of the regulatory environment, given the Trump administration’s favorable stance toward digital assets, seems to be the primary reason behind the restart.

USB’s bitcoin custody service will primarily cater to institutional investment managers with registered or private funds, looking for a secure safekeeping solution for bitcoin. Further, NYDIG, a vertically integrated bitcoin financial services and power infrastructure firm, will act as the bitcoin sub-custodian.

U.S. Bancorp will initially offer custody services for Bitcoin through traditional registered funds and ETFs before foraying into other crypto offerings.

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This article originally published on Zacks Investment Research (zacks.com).

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