On-chain data platform Token Terminal says BlackRock could launch its own blockchain, similar to Coinbase’s Layer-2 (L2) network, Base.
This assumption follows a look at the asset manager’s investments in various asset classes.
Token Terminal: Why BlackRock Blockchain is a Possibility
BlackRock divides its crypto holdings into three groups: crypto assets like Bitcoin (BTC), stablecoins like USDC, and tokenized assets like BUIDL. This information comes from the on-chain data platform Token Terminal, which analyzed the asset manager’s crypto strategy.
BlackRock reportedly identifies three clear advantages of Bitcoin as an asset. First, it is internet native, making it accessible worldwide. Second, Bitcoin’s efficiency in cross-border transactions is emphasized. Finally, the fixed supply ceiling positions it as a hedge against inflation.
Read more: What is tokenization on Blockchain?
BlackRock BUIDL. Source: Token terminal
Token Terminal highlights the role of BlackRock’s iShares Bitcoin ETF (exchange-traded fund), IBIT and expects the company to similarly produce all major crypto assets. Although BlackRock has already done this with Ethereum, the prospects for a Solana ETF remain slim for now.
Nevertheless, BlackRock’s on-chain data platform demonstrates BlackRock’s belief in the potential of blockchain technology to improve capital markets. It cites 24-hour operational capital markets, improved transparency and access for investors, lower fees and faster settlement. This research led Token Terminal to conclude that the company could launch its own blockchain, as Coinbase did with Base L2.
“We believe BlackRock will eventually launch its own blockchain and follow a similar playbook that Coinbase has used with Base. This would allow BlackRock to concentrate the tracking of its holdings across asset classes (€10t AUM) into a single, global, interoperable and transparent ledger,” concludes Token Terminal.
Possible Implications of BlackRock Blockchain for TradFi
BlackRock’s launch of a blockchain would mark a major shift in the traditional finance industry (TradFi), signaling a move towards decentralized solutions. Similar to how Coinbase transformed into a Web3 gateway with Base, BlackRock’s blockchain initiative could elevate the company from a traditional asset manager to a leader in digital assets.
Whether BlackRock will launch its own blockchain remains unknown, as the company did not immediately respond to BeInCrypto’s request for comment. Nevertheless, such a move would warrant clear regulation.
“As much as we would like to see this, unless the regulations and compliance around this are clear, this will not happen at all in the short term. This is given the need for compliance. One thing is, a whole blockchain ecosystem would be incredible, but how would they solve compliance?” one X user commented.
By leveraging blockchain technology, BlackRock could streamline its operations, reduce costs, increase transparency and improve the security of its wide-ranging financial products and services. This approach has the potential to revolutionize transactions and create a more efficient and secure financial ecosystem.
Furthermore, such a venture would provide new opportunities for its customers and investors to access a wide range of digital assets. They would also be exposed to more seamless and user-friendly investment opportunities. This would democratize access to financial products and strengthen BlackRock’s position as a leader in digital asset management.
The company has already set a new standard in tokenizing real-world assets (RWAs) with the success of BUIDL, BlackRock’s USD Institutional Digital Liquidity Fund. BUIDL recently became the largest tokenized fund, demonstrating the growth and increasing integration of blockchain technology into traditional finance (TradFi).
Read more: How to invest in real-world crypto assets (RWA)?
While overall demand for such tokenized products is still in its early stages, specific segments continue to show promising interest. BlackRock’s BUIDL and Franklin Templeton’s BENJI point to this effect.