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World’s largest asset manager BlackRock is exploring ‘tokenization of stocks’

World's largest asset manager BlackRock is exploring 'tokenization of stocks'

In an annual letter to investors published on March 17, 2023, Larry Fink, the chairman and CEO of BlackRock, the world’s largest asset management company, highlighted the exciting developments happening in the digital assets space. He noted that while Bitcoin has captured much of the media’s attention over the past year, there are interesting developments happening beyond the headlines.

According to Mr. Fink, in many emerging markets, such as India, Brazil, and parts of Africa, there are dramatic advances in digital payments, which are bringing down costs and advancing financial inclusion. However, BlackRock’s CEO suggested that in the United States, there is a lag in innovation, resulting in higher costs of payments. He said:

“In many emerging markets – like India, Brazil and parts of Africa – we are witnessing dramatic advances in digital payments, bringing down costs and advancing financial inclusion. By contrast, many developed markets, including the U.S., are lagging behind in innovation, leaving the cost of payments much higher.”

Explores the tokenization of asset classes

The chairman also highlighted the potential of tokenization of asset classes that could drive efficiencies in capital markets, shorten value chains, and improve cost and access for investors.

Mr. Fink noted that tokenization of the assets can help revolutionize the asset management industry, offering exciting applications for the underlying technologies in the digital assets space. He also said that BlackRock is actively exploring the ‘tokenization of stocks’.

“At BlackRock we continue to explore the digital assets ecosystem, especially areas most relevant to our clients such as permissioned blockchains and tokenization of stocks and bonds.” – Larry Fink said.

Additionally, the chairman of the investment giant noted that while there are clearly elevated risks and a need for regulation in the cryptocurrency market, BlackRock is optimistic about the potential of digital assets.

The company sees the industry as maturing and believes that the operational potential of the underlying technologies will continue to offer exciting opportunities.

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