Original Title: "BlackRock Makes Another Move: After Bitcoin, Now Wants to Bring Traditional ETF Onto the Chain"

Original Source: BitpushNews

Following the successful launch of a Bitcoin spot ETF, global asset management giant BlackRock has once again set its sights on blockchain.

According to Bloomberg, BlackRock is exploring the possibility of bringing funds tied to real-world assets (RWA), including traditional ETFs, onto the chain. This news quickly sparked market discussions and once again made "Asset Tokenization" a focal point of conversation.

This is not an isolated event. Fidelity's tokenized money market fund (FDIT, corresponding to FYOXX) has already launched on Ethereum this week, previously introduced under "stealth mode," held by institutions like Ondo, with an on-chain scale already in the hundreds of millions of dollars; Nasdaq has also applied to the SEC, hoping to have tokenized securities traded alongside traditional stocks on the exchange. It is evident that Wall Street is now engaged in an "on-chain" experiment.

BlackRock's Crypto Blueprint: From ETFs to On-Chain Funds

As the world's largest asset management company, BlackRock has established a comprehensive presence in the crypto field:

Two flagship products: iShares Bitcoin Trust and iShares Ethereum Trust have seen cumulative inflows of $55 billion and $12.7 billion, respectively, achieving AUM breakthroughs of over $10 billion within a year. Such rapid growth in the global ETF history is extraordinarily rare.

Thematic funds: iShares Blockchain and Tech ETF track a basket of blockchain and crypto-related technology company stocks, providing indirect exposure to the industry.

On-chain initiatives: The BUIDL Fund launched in 2023 (BlackRock USD Institutional Digital Liquidity Fund) became the first tokenized fund to exceed $1 billion in size and surpassed $2 billion in AUM in 2025, currently operating on the Ethereum chain.

Its CEO Larry Fink has stated multiple times: "All financial assets will eventually be tokenized." In his vision, blockchain will become the underlying operating system of the future financial markets.

However, BlackRock's tokenization efforts are still in the exploratory phase. Whether it is to scale up BUIDL or to further move traditional ETFs onto the chain, a core premise cannot be escaped—regulatory approval. Currently, the U.S. Securities and Exchange Commission (SEC) has not provided a clear framework, and there are divergent views among market participants on the significance and prospects of tokenization.

Skeptics: Traditional ETFs Are Sufficient

Some argue that tokenization has not brought additional value to retail investors. Bloomberg ETF analyst Eric Balchunas points out: ETFs themselves are already low-cost, highly liquid, and have low barriers to entry, with almost no reason to be replaced.

Moreover, the current state of the tokenized stock market is quite niche. According to RWA.xyz data, the total size of tokenized U.S. stocks on-chain (such as TSLA, AAPL) is less than $500 million, far below the trillions of dollars in the ETF market. Even though Robinhood and Kraken have launched tokenized stock trading, such products are still limited to the crypto-native community.

These views suggest that while tokenization may improve backend efficiency, it is almost imperceptible to the investor experience and is unlikely to disrupt the market again as ETFs did to mutual funds in the past.

Institutionalists: "Transitional Solutions"

ETF research expert Dave Nadig emphasizes that the current ETFs and tokenized stocks are more like "packaging layers," a kind of "transitional solution" based on the existing system.

Simply put:

It is not a real revolution: The current practices (such as tokenizing stocks) have not truly changed the traditional financial system. It is simply an additional layer on top of the existing system, wrapping stocks in a new package—tokens, while the core of this package—the stocks themselves—still operate under traditional financial rules.

Real tokenization requires legal reform: According to Dave Nadig, this refers to assets being fundamentally created, traded, and settled on the blockchain, no longer relying on traditional brokerages and clearinghouses. But such a true transformation is impossible without a rewrite of the law and comprehensive regulatory cooperation.

In conclusion, what everyone is discussing as "tokenized stocks" at the moment is only a "surface" improvement on the old system, and a true financial revolution requires a thorough overhaul from the legal and regulatory perspectives. Current securities laws and clearing rules do not allow for a complete on-chain substitution; the SEC has not clearly defined a compliance framework for tokenized securities; traditional finance relies on clearinghouses and custodians, making rapid replacement difficult.

This means that unless there is a large-scale legal rewrite, tokenization will always remain at the surface level, unable to achieve financial restructuring.

Pragmatists: Expanding the Boundaries of ETFs

The pragmatist voice focuses on "incremental users" and "new gameplay." Ondo Finance CEO Iandebode emphasizes that the value of tokenization is not to replace ETFs but to expand their use cases and user base.

Accessibility: Globally, there are still billions of people who, due to their location, capital account controls, or investment thresholds, cannot directly buy into index funds like VOO. Tokenization can allow them to access these assets on-chain.

Utility: Tokenized ETFs are not just "buy and hold"; they can also directly participate in DeFi as on-chain assets: collateralized borrowing, liquidity provision, automated strategy deployment, etc.

This design is similar to Fidelity's launch of on-chain money market funds or Kraken's offering of tokenized stocks: they do not overturn the original products but provide assets with more liquidity and composability. Therefore, tokenization will be the "second growth curve" of ETFs, not a replacement but an extension.

Amidst various disagreements, BlackRock's positioning appears particularly crucial. It represents both a probing move by the world's largest asset management company and a potential model for the integration of Wall Street and the crypto world.

In the short term, tokenization struggles to compare with the trillion-dollar ETF market. But in the long run, with more institutions entering the space and regulatory frameworks gradually becoming clearer, this experiment may indeed move from the edge to the core, even changing the underlying logic of the financial markets. Is BlackRock's move a case of "old wine in a new bottle" or the prologue to a "financial exodus"? The answer may gradually unfold.

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