Sources say that BlackRock is looking into converting certain ETFs—especially those tied to stocks and bonds—into blockchain tokens. this would allow those ETFs to be issued, traded, and settled using blockchain infrastructure.

One of BlackRock’s earlier forays into tokenization is its BUIDL fund (BlackRock USD Institutional Digital Liquidity Fund), which is backed by U.S. Treasuries, repurchase agreements, and cash. That fund has already amassed billions in assets.

Potential advantages of tokenized ETFs include 24/7 trading hours (rather than being limited to normal stock market hours), much faster settlement times (possibly reducing from days to minutes), fractional ownership, and increased access for investors in regions without easy access to traditional financial markets.

However, there are important challenges to consider. Regulatory approval is required, and laws around securities, taxation, and investor protection will need to be addressed. Also, integrating blockchain technology with existing systems (custody, compliance, auditing) is complex.