BlackRock: tokenization could be 'one of the most transformative elements' in the market

Source: Exame
Original Title: BlackRock: tokenization could be ‘one of the most transformative elements’ in the market
Original Link:
The cryptocurrency market is going through an accelerated process of institutionalization that is expected to lead to the incorporation of several elements from the sector into the world of traditional finance, with tokenization standing out for its transformative nature. This assessment was shared by executives from BlackRock, Citi, and Julius Baer on Wednesday, the 3rd.

Tony Ashraf, managing director and global head of Digital Assets at BlackRock, Ronit Ghose, global head of Future of Finance at the Citi Institute, and Michael Martin, senior manager of Wealth Management & Digital Assets at Julius Baer, spoke on the topic during Blockchain Week, organized in Dubai by the exchange.

Ashraf highlighted that “everyone looks at the last 18 months and says everything changed very quickly in the crypto market. But we’ve been watching this sector for 10 years.” According to him, the world’s largest asset manager has decided to adopt a three-part approach regarding its initiatives and the potential of the crypto market.

The first involves seeing cryptocurrencies “as just another asset class, building products, integrating the assets into the traditional market and technology, and developing ETFs focused on institutional adoption.” The second involves stablecoins, which he classified as the “evolution of money and value transfer.”

Finally, BlackRock has also been exploring the world of tokenization, which, according to Ashraf, “is still in its early stages, but could be one of the most transformative elements in the evolution of the capital markets.” In BlackRock’s case, the focus has been on the potential use of the process to change the way products are distributed.

The executive points out that this approach results in a “duality” in the asset manager’s strategy: “On one hand, we are integrating cryptoassets into the traditional structure. On the other, we are taking traditional assets and turning them into cryptoassets, making them available to the Web3 market.” The focus, however, remains the same: “To increase accessibility to our products.”

New phase for the crypto market

Ronit Ghose noted that the recent advances observed in the crypto market reflect a movement “from BlackRock and other companies that launched either tokenized investment products or stablecoins.” The Citi executive referred to these two types of assets as the “twin engines driving institutional interest in the sector.”

In Citi’s case, he pointed out that the focus on the crypto world “started with a curiosity that wasn’t commercially relevant,” but that changed when “large clients began to get involved with the sector.”

Regarding stablecoins, he believes that “they have become so important and large because the US government is fully supporting them. And that changes the game. Now, they are starting to move out of the crypto-native world into a broader world. Every bank in the United States needs to have an interest in this.”

Meanwhile, Martin from Julius Baer states that ETFs “seem to be the vehicle that investors were demanding. They make allocation much easier for institutions, and the flows have already surpassed those of the spot market for the asset. Basically, these are people who have come to understand the asset and the sector,” helping to accelerate its adoption.