BlackRock, Franklin Templeton deepen push into tokenization

BlackRock and Franklin Templeton are advancing their efforts to bring traditional investment products onto blockchain rails, signaling a growing interest among major asset managers in the potential of tokenized funds.

BlackRock, the world’s largest asset manager, is exploring ways to offer exchange-traded funds as tokens on public blockchains, people familiar with the matter told Bloomberg.

The firm is considering tokenizing funds tied to real-world assets such as stocks, though any move would depend on regulatory approval.

This follows BlackRock’s earlier foray into digital assets with its tokenized money-market fund, BUIDL, which has grown to over $2 billion since its launch in 2024 and has gained traction on crypto platforms, as well as the smashing success of its spot Bitcoin ETF.

Tokenization, the process of creating digital versions of traditional assets for use on blockchain systems, could allow ETFs to be traded around the clock, potentially making US products more accessible to global investors and enabling new uses as collateral in crypto networks. Proponents say the shift could also bring benefits such as instant settlement and fractional ownership, though the market for tokenized assets remains small – about $28 billion, according to tracker rwa.xyz –compared with the multi-trillion-dollar US ETF industry .

BlackRock’s interest is part of a broader trend as banks, fintechs, and asset managers test blockchain rails for bonds, private credit, and mainstream equity funds. The firm has also tested tokenized fund shares in trades on JPMorgan’s Kinexys infrastructure and has positioned itself as an early adopter of digital-settlement models.

Chief executive Larry Fink reiterated his conviction in his most recent annual letter, asserting that every financial asset can be tokenized.

“Tokenization allows for fractional ownership,” he wrote. “This lowers one of the barriers to investing in valuable, previously inaccessible assets like private real estate and private equity.”

Franklin Templeton, another major player in asset management, is also expanding its digital asset initiatives. On Thursday, the firm announced a collaboration with Binance, the world’s largest cryptocurrency exchange by trading volume, to develop digital asset products that aim to bridge traditional and decentralized markets.

The partnership will combine Franklin Templeton’s expertise in compliant tokenization of securities with Binance’s global trading infrastructure.

“As these tools and technologies evolve from the fringes to the financial mainstream, partnerships like this one will be essential to accelerating adoption,” Sandy Kaul, head of innovation at Franklin Templeton, said in the statement unveiling the partnership.

She added that blockchain presents an opportunity to reimagine legacy systems, rather than a threat to them

Roger Bayston, head of digital assets at Franklin Templeton, said the firm’s goal is to take tokenization “from concept to practice for clients to achieve efficiencies in settlement, collateral management, and portfolio construction at scale.”

Specific products from the collaboration are expected to be announced later this year.

The moves come as exchanges such as Kraken and Robinhood offer tokenized stocks overseas and as startups pilot similar services in controlled environments. Nasdaq has also asked regulators to allow trading of tokenized versions of stocks on its exchange, which could mark a significant test of blockchain technology in US equity markets .

Read more: Goldman Sachs, BNY bring money market funds to the blockchain party