BlackRock CEO Says ‘Next Generation for Markets’ Is Tokenization

Tokenization, the process of creating a digital representation of an asset on a blockchain, is gaining traction in the financial industry as a way to trade assets such as stocks, bonds, real estate, and even alternative assets like art or wine. The technology allows for the transfer of these assets to be recorded on a public ledger, providing benefits such as instantaneous settlement and reduced fees.

BlackRock CEO Larry Fink recently spoke about the potential of tokenization at a New York Times DealBook event, stating that it wouldn't disrupt the company's business model. BlackRock isn't the only organization betting on tokenization as the future of financial services – Flowcarbon, a start-up tokenizing carbon credits, recently raised $70 million in funding from investors including a16z, General Catalyst, and Samsung Venture Investment. JPMorgan has also experimented with tokenization, using Polygon to trade tokenized cash deposits in a Singapore-based trial via Onyx Digital Assets, a private blockchain created by the bank.

Despite the potential of tokenization, Fink also noted that most cryptocurrency-related companies "are not going to be around" in the future, though he believes that blockchain technology will be "very important." He also commented on the recent collapse of cryptocurrency exchange FTX, stating that the company's fatal flaw was creating its own token. BlackRock had a $24 million investment in FTX, held in a subsidiary "fund of funds," but not in the company's core business.