Larry Fink, CEO of the world’s largest asset management company BlackRock, has expressed his belief that tokenizing asset classes such as stocks and bonds could foster efficiency in capital markets and improve investor access. In his latest annual letter to investors, Fink noted that BlackRock is currently exploring the digital asset industry and will continue to do so, especially in areas related to permissioned blockchains and tokenization of stocks and bonds. He believes that the operational potential of the underlying technologies in the digital assets space could have exciting applications, such as driving efficiencies in capital markets, shortening value chains, and improving cost and access for investors.
Fink also noted that while emerging markets like India, Brazil, and parts of Africa are seeing advances in digital payments and financial inclusion, many developed markets, including the U.S., are lagging behind in innovation. This has led to U.S. authorities clamping down on crypto entities, such as regulatory issues with stablecoin issuing company Paxos and the abrupt closure of crypto-friendly Signature Bank. Fink believes that the digital asset space needs more precise regulation as the industry matures, and clear rules would help investors become aware of the risks associated with the sector.