"The rapid growth of Bitcoin shows how much money laundering is taking place around the world."-Larry Fink, Chief Executive Officer of BlackRock, during the International Finance Association meeting in October 2017
"I was wrong about Bitcoin. Bitcoin is digital gold and a legitimate financial product."-Larry Fink, during a CNBC interview in July 2024
"All assets, including stocks, bonds, and real estate, can be tokenized. (Omitted) Tokenization is democratization."-Larry Fink, in the BlackRock shareholder letter in March 2025
The recent comments by BlackRock Chief Executive Officer Larry Fink show how his perception of virtual assets has changed. Bitcoin and Ethereum, which had been criticized for being used for money laundering and tax evasion, are now part of the portfolios of institutional investors managing astronomical amounts of capital, becoming digital gold. Now, opinion leaders, including Larry Fink, are presenting tokenization as a new topic for virtual assets.
Tokenization involves embedding the legal rights of an asset into a type of cryptocurrency token, allowing anyone to buy and sell. If a $10 million property is divided into 10,000 tokens and issued at $1,000 each for trading, it is said to have been tokenized. A holder of one token can exercise rights equivalent to 1% of the property, meaning they can receive 1% of the revenue generated from renting the property. The tokens held can be sold to a third party like stocks or redeemed like a fund. By simply buying and selling tokens without additional costs such as drafting a shared equity purchase agreement, investment in property equity becomes possible.
The biggest advantage of tokenization is that anyone can easily invest with small amounts. Financial products that were previously difficult to access, such as foreign unlisted stocks or private equity funds, are now accessible with just one click of the token purchase button. High-value assets like real estate, which were once deemed too expensive to invest in for those with limited seed money, can now be accessed with smaller amounts. There is no need to draft complex contracts or bear expenses. While currently limited to some financial products and real estate, there are expectations that all assets that can be valued numerically will eventually become available for tokenization.
Larry Fink stated in the BlackRock shareholder letter that the existence of tokens now allows anyone to invest easily and with small amounts 24/7, saying, "Tokenization is democratization." Larry Fink noted, "When all assets are tokenized, there will be a revolution in investment," adding, "Assets can be partitioned into infinitely small pieces, and barriers will be lowered as investors can now invest in assets that were previously inaccessible."
◇ Spread from the U.S. government bond market to the stock market
The fastest progress in tokenization is taking place in finance. In particular, tokenized U.S. government bonds exceeded $7.4 billion (approximately 10 trillion won) as of the 25th of last month, showing a sharp growth trend. Purchasing tokens leads to automatic investments in U.S. Treasury bills and repurchase agreements. Among these, BlackRock's U.S. Treasury token (Beatle) is approaching 4 trillion won. Currently, the market is primarily focused on institutional investors, but tokens aimed at the general public are also being issued, indicating that wider adoption is only a matter of time.
Recently, tokenization has been accelerating primarily around the stock market. The U.S. stock investment platform Robinhood has already launched a service allowing European users to trade over 200 tokenized U.S. stocks and exchange-traded funds (ETFs) 24/7. Cryptocurrency exchanges like Bybit and Kraken have also tokenized popular stocks like Apple, Tesla, and Nvidia for trading. Some exchanges have introduced stock futures tokens that allow for leveraging. Previously, to invest in foreign stocks, you had to transfer cash to a brokerage account, exchange it for dollars, and trade only during designated hours. Now, investment is completed by simply purchasing tokens anytime, 24/7, significantly reducing the currency exchange fees and transaction costs involved.
Tokenization of unlisted stocks is of particular interest. Earlier, Robinhood announced plans to tokenize the unlisted stocks of OpenAI, which operates ChatGPT, drawing significant attention. This was good news for everyday investors worldwide who were unable to find ways to invest in OpenAI, which has no plans for public listing. If it becomes reality, it would also expand investment opportunities for Korean investors investing abroad.
According to Castle Labs, a platform analyzing the tokenization market, as of the 25th of last month, the total value of tokenized assets excluding stablecoins was approximately $26.5 billion (36.7 trillion won). The market capitalization of commodity-related tokens, including gold, silver, and crude oil, reached $1.84 billion, while the stock token market is valued at $360.49 million. McKinsey projected in a report released last June that the market capitalization of tokenization could reach $2 trillion by 2030.
◇ Stablecoins, the reserve currency of the tokenization market
For tokens linked to assets to trade across borders 24/7, stablecoins are essential. To maintain a 'tokenization market' where people around the world can buy and sell tokens, there must be a unified currency usable in this market, which is being replaced by stablecoins, referred to as 'digital reserve currencies.' Just as stocks are traded in yen in the Japanese stock market, tokens in the tokenization market are traded in stablecoins.
Stablecoins are designed to maintain a stable value, ensuring that 1 coin is always equivalent to $1. However, most are being used instead of cash when trading other coins like Bitcoin. According to the Boston Consulting Group, 88% of stablecoin transactions last year were for coin trading, while only about 10% were used as payment or settlement means in everyday life.
However, there are concerns that as tokenization makes investment and transactions easier, it could lead to overheating. High-value assets such as real estate or artwork traditionally seldom change hands, but if tokenization draws excessive interest from the general public, demand could surge, leading to prices soaring above actual value.
Jung Min-kyo, a researcher at Presto Research, noted, "The idea of enabling stock transactions on blockchain (tokens) has been around for some time," adding, "While in the past, it hovered between legal and illegal, it is now moving into the realm of legality, leading to increasing interest." He continued, "More than 70% of stablecoins are currently used for trading coins on exchanges," stating, "In the end, stablecoins are being used to purchase other assets."