BlackRock evaluates tokenized ETFs on blockchain

Recently, according to Bloomberg, BlackRock is examining the tokenization on blockchain of some ETFs linked to real assets. This step, if confirmed, could accelerate the settlement, increase liquidity, and push traditional finance towards continuous operations. The indication—coming from anonymous sources—describes an exploratory phase, while the asset giant, managing over 10 trillion dollars of AUM (data updated to 2025), looks at new digital frontiers. In this context, attention remains focused on operational impacts and possible adoption timelines, still subject to internal evaluation. BlackRock has already conducted experiments on the topic with the launch of the tokenized fund BUIDL in 2024.

According to data collected by market analysts up to September 2025, institutional interest in tokenization solutions has grown significantly compared to the 2021–2023 period. Custodians and managers surveyed by industry observers report that the technical integration phase typically requires joint testing on clearing, KYC/AML, and reporting, with validation timelines often exceeding 12 months.

What Happened

Sources cited by Bloomberg report that BlackRock, the world’s largest asset manager based in New York, is considering the possibility of issuing tokenized ETFs on blockchain, focusing on funds that replicate stocks and other traditional financial assets. The article, authored by Olga Kharif, was published recently. The company has not released official comments on the dossier, indicating that the phase remains cautious. It should be noted that the topic is not foreign to its strategy: in 2024 BlackRock launched the tokenized fund BUIDL on a public network in collaboration with Securitize, marking a significant precedent in the realm of digital assets. Indeed, the experience gained provides a technical and procedural foundation to build upon.

Why it is relevant

• Faster settlement: tokens and smart contracts can reduce reconciliation steps; the US market transitioned from T+2 to T+1 starting in May 2024, reducing settlement times and making settlement efficiency an operational priority for operators. In this context, shortening the settlement cycle becomes an enabling factor for on-chain solutions.
• Greater liquidity: the splitting of shares and the ability to trade in 24/7 mode can reduce the friction related to hours and lower transaction costs. That said, the actual depth will depend on adoption by operators.
• On-chain transparency: the use of distributed ledgers allows real-time verification of issuances, transfers, and ownership, increasing investor trust. However, the implementation must preserve privacy and controls.
• Operational efficiency: the automation of back-office and reconciliation processes, managed by smart contracts, can positively impact costs and operational risk. In fact, fewer frictions often result in more streamlined process chains.

How Tokenized ETFs Would Work

In the proposed model, the manager holds the underlying assets in custody, while issuing tokens that represent the fund’s shares. The smart contracts regulate issuance, transfers, any restrictions, and compliance functions (KYC/AML), and the distributed ledger ensures the traceability of operations. In this context, the conversion between the on-chain and off-chain world would become a key step for daily operations.

• Digital representation: each token is equivalent to a share of the fund, offering a direct digital representation. Alignment with the NAV would remain, as always, central.
• Custody: the assets remain entrusted to regulated custodians, while the tokens are managed through institutional wallets. The segregation of resources and controls remain unchanged in principles.
• Network: the choice between a public blockchain or a permissioned network will depend on the security requirements and the applicable regulations. It should be noted that interfacing with existing systems will be crucial.
• Access: regulated on-ramps and off-ramps will be set up for subscriptions and redemptions, integrating the required compliance aspects. This is to facilitate an orderly flow between investors and infrastructure.

Simplified scheme: real assets in custody → token issuance → on-chain trading → automated reporting and reconciliation.

The regulatory knots to untie

The regulatory framework remains the crucial element. In the United States, tokenized ETFs will have to comply with the rules applicable to financial instruments, with additional requirements related to custody and on-chain transfers. In Europe, the DLT Pilot Regime is paving the way for experiments on market infrastructures based on DLT, while the MiCA does not comprehensively cover traditional financial instruments (ESMA). That said, approval times and technical standards remain decisive.

• Investor protection and transparency requirements of disclosures.
• Anti-money laundering and compliance with international sanctions.
• Responsibility and resilience of the smart contracts used.
• Interoperability between ledgers and clearing infrastructures, essential for seamless integration with traditional markets.

Market Data and Context

• Potential scale: Industry estimates suggest that the value of tokenized assets could reach trillions of dollars by 2030, as highlighted in reports by BCG and other industry players. Indeed, projections indicate a vast pool for digital assets.
• Transition to T+1: The US market has formally adopted the T+1 settlement starting from May 2024; this change reduces exposure times and impacts collateral requirements and operational needs for the integration of on-chain solutions.
• Track record: the launch of the tokenized fund BUIDL in 2024 indicates an experimental trajectory already initiated by institutional players in the field of digital assets. However, scalability remains a subsequent step; many pilot projects from 2024–2025 indicate technical progress but limitations in initial liquidity.

Practical Implications for the Market

• Institutional investors: they could benefit from greater treasury optimization and more agile collateral management thanks to faster settlement times. In this context, operational flexibility becomes a factor not to be overlooked.
• Market maker: the enhancement of arbitrage algorithms between the net asset value (NAV) and the market price could improve the depth of the book. That said, the efficiency will depend on the quality of on-chain data flows.
• Custodians and administrators: an increasing demand for digital infrastructures is expected, with on-chain control systems and greater auditability of operations. This involves procedural adjustments and resilience testing.
• Compliance: regulatory authorities will require advanced monitoring tools and integrated controls in smart contracts to ensure adherence to evolving regulations. Indeed, compliance remains a pillar of adoption.

Possible Timeline (Scenario)

• Pilot phase (in the next 6–12 months): selection of funds with high flows and initial application aimed at qualified investors. The goal would be to test basic functionalities in controlled environments.
• Expansion (in the next 12–24 months): gradual integration on public or permissioned networks and expansion of use cases. In this phase, feedback from operators will be central.
• Integration (over 24 months): development of interoperability with brokers, clearing, and custodian banks, subject to regulatory confirmation. Full implementation will require technical and procedural harmonization.

What to Know in Brief

• The news, based on anonymous sources reported by Bloomberg, concerns the exploration of tokenized ETFs linked to real assets and decisions strongly influenced by the regulatory framework.
• The focus is on ETFs linked to tangible assets, with potential benefits such as faster settlement, increased liquidity, and on-chain transparency.
• A relevant precedent is represented by the tokenized fund BUIDL, launched in 2024.

Conclusion

The evaluation of tokenized ETFs by BlackRock signals an acceleration towards more efficient market infrastructures, with potential benefits in terms of liquidity, transparency, and operational costs. 

Naturally, large-scale adoption will depend on the clarity and confirmation of the regulatory framework, as well as the maturity of technical solutions: the convergence between traditional finance and distributed technologies is underway, but full integration will require time and concrete results on real use cases. That said, the path outlined by the initial experiments serves as a reference for the next steps.