In a pronounced shift in the digital asset landscape, the world's largest asset manager BlackRock signaled a stronger alignment with public blockchain networks, particularly ethereum, over permissioned alternatives. This key idea emerged during the conference “Beyond bitcoin ETFs: What's Next on the Institutional Roadmap?” panel at Coinbase's 2024 State of Cryptocurrency Summit on Thursday.
BlackRock doubles down on ethereum
Samara Cohen, BlackRock's chief investment officer for ETFs and index investments, expressed a decisive stance on the evolution of blockchain technology in financial markets. Cohen said: “A few years ago we thought that private permissioned blockchains would be the leaders. “We now realize that public blockchains are better for the ecosystem.”
His comments at the summit reflect a broader consensus that has been quietly forming among traditional market participants who favor open source platforms like ethereum to avoid liquidity fragmentation and ensure broader and more efficient market participation.
<blockquote class="twitter-tweet”>
Blackrock CIO of ETFs and index investments twitter.com/Samaraepcohen?ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>@Samaraepcohen said today at the Coinbase event that permissioned blockchains have lost and that traditional market participants are uniting around open source. twitter.com/hashtag/ethereum?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>#ethereum for tokenization, so as not to fragment liquidity
— matthew sigel, recovering CFA (@matthew_sigel) twitter.com/matthew_sigel/status/1801342560977190937?ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>June 13, 2024
This shift aligns with the recent initiative by BlackRock, which launched its first tokenization project on the ethereum blockchain in March. In collaboration with Securitize, a US-based company, BlackRock tokenized the “Institutional Digital Liquidity” fund. This move provided the platform with initial liquidity of $100 million, denominated in USD Coin (USDC). The fund primarily invests in cash, short-term debt securities and US Treasuries, using the ethereum architecture to facilitate its operations.
Hunter Horsley, CEO of Bitwise, further confirmed BlackRock's move towards public blockchains. Speaking separately, Horsley x.com/HHorsley/status/1801435226314576177″ target=”_blank” rel=”noopener nofollow”>highlighted definitive conclusion to the long-running debate between the merits of permissioned and permissionless blockchains, stating: “This used to be a debate. The will has been resolved quietly: without permission.”
Anthony Sassano, renowned angel investor, advisor and founder of The Daily Gwei x.com/sassal0x/status/1801450907189846143″ target=”_blank” rel=”noopener nofollow”>commented
The panel discussions also included insights from other financial leaders such as Sandy Kaul, senior vice president at Franklin Templeton, and Alesia Haas, chief financial officer at Coinbase. The panel theme highlighted the year 2024 as pivotal for deeper integration of cryptocurrencies and traditional financial sectors (TradFi) through instruments such as ETFs and asset tokenization.
The consensus among these financial leaders underscores an important trend: the integration of blockchain technology into conventional financial practices is not only increasing but is doing so through platforms that offer transparency, accessibility and broad governance. The preference of ethereum over permissioned blockchains by institutions like BlackRock marks a noteworthy development.
At press time, eth was trading at $3,522.
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