BlackRock’s CEO considers the tokenization of securities as the next stage in the development of the financial market, despite having issues with tokens produced by centralised exchanges.
According to the CEO of BlackRock, the largest asset management company in the world, FTX failed because it developed its own FTX Token, which was centralised and incompatible with the “whole premise of what crypto is.”
Larry Fink, the $8 billion investment firm’s chairman and CEO, made the comments on Nov. 30 at the 2022 Dealbook Summit hosted by the New York Times. He added that despite thinking that FTX’s self-developed token was to blame for the company’s demise, he still thinks that cryptocurrencies and the blockchain technology that powers them will be revolutionary.
Centrally controlled exchange coins like Binance Coin and Cronos, a rival exchange, from Crypto.com CRO,approximately $57 billion of the $862 billion total market capitalization of cryptocurrencies.
Fink stated that “most of these firms [managing the tokens] are not going to be there” and that he was still suspicious about these tokens.
Later on in the conversation with Andrew Sorkin of the New York Times, Fink stated that while he believes that exchange-traded funds (ETFs) were responsible for the last evolution of investing, he thinks tokenization will be the driving force behind the next. He noted:
“The future of markets and securities, in my opinion, lies in the tokenization of securities. ”
The investment ecosystem would change, he continued, as “instantaneous settlement” on distributed ledgers that display every owner and seller of shares would be possible rather than relying on banks. He then went into more detail about some of the potential advantages of tokenization.
We’re going to significantly reduce fees, he said, “think about rapid settlement [of] bonds and stocks, no middlemen.”
In a live interview, Sam Bankman-Fried was questioned about the demise of FTX.
Fink acknowledged that BlackRock had made a $24 million investment in FTX, but he declined to comment on claims that BlackRock and other venture capital companies, like Sequoia Capital, had neglected to conduct adequate due diligence on FTX.
The Sequoias of the world have had tremendous returns over a long period of time; I am sure they performed their due diligence. As of right now, “we can make all the decisions that it looked that there was some misbehaviour of major consequence.”
Since 2020, BlackRock has participated actively in the cryptocurrency market.
On Nov. 3, it made an announcement announcing that it would be handling the reserve money of USD Coin (UDSC) issuer Circle.
On September 27, it announced the opening of an ETF that would expose investors to 35 blockchain-related businesses.
