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Highlights
- BlackRock's CEO has called on the SEC to approve tokenization of bonds and stocks as it will help save costs for institutions.
- He added that it will also make investing easier and more cost-effective.
- Bloomberg analyst Eric Balchunas questioned the importance of tokenizing stocks and bonds.
In a recent development, BlackRock’s CEO Larry Fink has called on the US Securities and Exchange Commission (SEC) to approve the tokenization of bonds and stocks. He further explained how this move would make things easier for investors.
Larry Fink Calls On SEC To Approve Tokenization Of Bonds
In a CNBC interview, BlackRock’s CEO Larry Fink called on the US SEC to approve the tokenization of bonds and stocks. He added that this move will simplify things and make things easier for institutions and investors.
Fink gave an example of how tokenization will help his company save costs. They will no longer have to vote on a proxy vote again because every investor will be notified through the tokenization of equities.
He added that this move will also save costs for investors and potential ones since it will bring down the cost of owning these stocks and bonds. In line with this, he affirmed that these are the types of financial reforms that the market needs.
Larry Fink’s call for the tokenization of bonds and stocks came as he admitted that he is a “huge believer” in crypto, blockchain technology, and tokenization.
It is worth mentioning that BlackRock already has a tokenized market fund called BUIDL. Built on the Ethereum network, it is the largest tokenized money fund on a public blockchain, with a market cap of just over $600 million.
Meanwhile, the BlackRock CEO’s latest comment comes a day after he predicted that the Bitcoin price could hit $700,000 if sovereign wealth funds allocate 2%-5% of their portfolios to the flagship crypto.
Bloomberg Analyst Questions Use Of Tokenization
Following Larry Fink’s call for the tokenization of stock and bonds, Bloomberg analyst Eric Balchunas questioned if this move was indeed necessary. He explained how he could already buy these assets for no fee and with no friction, with “anti-fragile regulatory safeguards to boot.” In line with this, he suggested that tokenization doesn’t in any way improve the experience.
Tokenization grants investors self-custody over their assets. However, Balchunas remarked that no one really cares about self-custody as investors want to outsource the management of their assets, especially for no fee. He added the fact that these asset managers are regulated by the SEC, so investors are well protected.
Despite Balchunas’ reservations about tokenizing bonds and stocks, the SEC could approve this move. Donald Trump recently named pro-crypto Mark Uyeda as the acting SEC Chair, who could be more open to Larry Fink’s proposal, unlike the previous Chair, Gary Gensler.
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