BlackRock chief highlights tokenisation benefits for capital markets

Tokenisation can boost efficiency in capital markets. In a letter to shareholders, said BlackRock CEO Larry Fink.

The expert noted that, thanks to the technology, the asset-management industry can create “exciting applications”.

“Tokenisation of asset classes opens up prospects for greater efficiency in capital markets, shortening value chains and reducing costs and improving access for investors,” explained Fink.

BlackRock CEO pledged that the company will continue studying the digital-asset ecosystem, “especially areas most relevant to our clients, such as private blockchains, as well as tokenisation of equities and bonds”.

Fink added that the organisation will not rush to bring new products to market.

“There are elevated risks in the market and a need for regulation. BlackRock is committed to operational excellence. We plan to apply to digital assets the same standards and controls as in the business as a whole,” he explained.

Beyond tokenisation prospects, Fink also highlighted progress in digital payments as a topic of interest.

“In many emerging markets, such as India, Brazil and some African countries, we are seeing significant progress in digital payments, reducing costs and expanding access to financial services,” he said.

The executive noted that events in these regions contrast with the sluggish momentum in developed markets. He said that the latter, including the United States, “lag in innovation, resulting in much higher payments costs.”

In April 2022, Fink stated that BlackRock was exploring digital assets, stablecoins, permissioned blockchains and tokenisation. He said that clients of the investment giant were increasingly interested in this sector.

Earlier reports indicated that BlackRock would add the ability to trade cryptocurrencies to the Aladdin portfolio-management system. It was also reported that the company planned to integrate a collateralised digital-asset lending service.

At the end of 2022, BlackRock-managed fund-of-funds invested $24 million in the bankruptcy-proceedings of the Bitcoin exchange FTX.