Blackrock CEO Believes Tokenizing Asset Classes Would Foster Efficiency in Capital Markets

BlackRock’s Chief Executive Officer, Larry Fink, thinks that tokenizing asset types like bonds and shares might increase capital market efficiency and broaden investor accessibility.

In his most recent annual letter to clients, the CEO stated that BlackRock is now investigating the crypto currency market and will keep doing so, particularly in areas connected to permissioned blockchains and the tokenization of assets such as bonds and stocks.

In addition, the letter expressed his opinion that there are other digital assets with operational efficiencies and possibilities than Bitcoin. The BlackRock CEO revealed that the emerging industry is experiencing fascinating developments outside of the excitement and interest over cryptocurrency.

Tokenization to Improve Payment Systems: BlackRock CEO

The BlackRock executive also discussed improvements in payment systems and financial inclusion in emerging economies including Brazil, India, and some regions of Africa. On the other hand, he claimed that industrialized markets in the United States are trailing behind in terms of payment innovation. 

“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,” he said.

Fink thinks that as the digital world expands, new opportunities may appear despite the collapse of big crypto companies like FTX. 

“For the asset management industry, we believe the operational potential of some of the underlying technologies in the digital assets space could have exciting applications. In particular, the tokenization of asset classes offers the prospect of driving efficiencies in capital markets, shortening value chains, and improving cost and access for investors,” he noted.

Notably, it was discovered in December of last year that, prior to the collapse of the cryptocurrency exchange, the world’s largest asset management company held $24 million in FTX.