Larry Fink, CEO of the world’s largest asset management company, BlackRock, believes that tokenizing asset classes such as stocks and bonds could foster efficiency in the capital markets and improve investor access.
The CEO noted In its latest annual letter to investors, BlackRock is currently exploring the digital asset industry and will continue to do so, especially in areas related to permissioned blockchain and stock and bond tokenization.
BlackRock to explore tokenized stocks and bonds
In the letter, Fink opined that the operational potential in the digital asset space goes beyond Bitcoin. The CEO revealed that there are fascinating developments taking place in the nascent industry beyond the hype and obsession with cryptocurrencies.
In spite of the failure of major crypto entities like FTX, digital payments are advancing rapidly. Fink believes that innovative applications for the asset management industry could emerge as the digital space it grows.
“For the asset management industry, we believe that the operational potential of some of the underlying technologies in the digital asset space could have interesting applications. In particular, the tokenization of asset classes offers the potential to boost efficiencies in capital markets, shorten value chains, and improve costs and access for investors,” he said.
America is lagging behind in innovation: Fink
The BlackRock CEO also spoke about emerging markets such as Brazil, India and parts of Africa that are seeing advances in payment systems and financial inclusion. Rather, he argued that developed markets like the United States lag behind in payments innovation.
“In many emerging markets, such as India, Brazil and parts of Africa, we are seeing dramatic advances in digital payments, lowering costs and promoting financial inclusion. By contrast, many developed markets, including the US, are lagging behind in innovation, making the cost of payments much higher,” Fink said.
In recent weeks, US authorities have clamped down on crypto entities. Of the regulations affairs with the stablecoin issuing company Paxos to the abrupt closing From crypto-friendly Signature Bank, US regulators have tightened their oversight of the digital asset industry.
But Fink believes that the digital asset space needs more precise regulation as the industry matures. He hinted that clear rules would help investors become aware of the risks associated with the sector.
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