EXCLUSIVE: Inside BlackRock’s Digital Asset Strategy And What's Next

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When BlackRock, the world’s largest asset management firm, forayed into the digital assets sector a few years ago, the industry went wild. 

Although it seemed like an inflection point for many, BlackRock’s entry was actually informed by  a simple accounting of its clients’ challenges and opportunities, according to Max Stein, a director on the Digital Assets team at BlackRock.

“The story isn't necessarily about solving something that's a real problem for traditional finance,” Stein said on StrataMedia’s Talking Tokens, in his first, exclusive podcast interview. “[Institutions] have pretty phenomenal access to a lot of these assets. It's really about broadening that access to new investors and extending some of those capabilities.”

Historically, regulated investors like banks and major hedge funds had limited access to onchain products or crypto assets, as did traditional investors unfamiliar with decentralized finance. 

“It was really challenging for a lot of our traditional clients to get access to bitcoin, so the ETF wrapper helped solve that for tokenized products,” Stein said, referring to BlackRock’s  iShares Bitcoin Trust (IBIT), a bitcoin ETF wrapper. The firm’s bitcoin exchange-traded fund (ETF) launched in January 2024 alongside a slew of bitcoin ETFs after the U.S. Securities and Exchange Commission approved the product category. 

While the firm’s spot bitcoin ETF is one of many providing exposure to bitcoin, IBIT hit the ground running and has grown fast to become  the largest spot bitcoin ETF with over $60 billion in assets under management.

In 2024, BlackRock also launched its first tokenized fund, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), in partnership with Securitize to provide short-term treasury exposure to US dollar yield onchain. The fund today has a total asset value of about $2.5 billion, up 16% over the past 30 days, according to RWA.xyz.

“The feedback we’re getting definitely surpasses expectations,” Stein said. “There’s a lot of excitement, in particular, with some of the products we’ve launched.” Today, he views institutional adoption as a part of crypto’s evolution. 

The market’s validation has helped the firm demonstrate that “tokenization isn’t just a proof of concept or an innovation experiment, but can actually be quite commercial,” Stein said. 

As a result, asset managers and crypto natives alike are starting to show significant interest. Investors are currently more focused on stablecoins front than tokenized assets, but Stein thinks it’s only a matter of time until the interest flows over. “I think once you get comfortable with stablecoins, then the obvious next step is to understand tokenized assets.” 

Stein  says the next big thing is going to be “tokenized cash,” which can be interpreted across stablecoins, tokenized registered-money market funds, private treasury funds, U.S. Treasuries, tokenized deposits, and other permutations of onchain assets. “I know it's a boring answer. People want something a little bit more esoteric, like wine or carbs. But at this stage, I think that market is still very small.”

As it stands, tokenized cash has been “successful in tokenization terms,” Stein said. “going from probably $300 million, when Franklin Templeton was first to market, to now $11 billion or $12 billion.” And there are a number of issuers that have entered the market from the institutional side, so these products are starting to scale, but you still only have a fairly concentrated pool of buyers, he added. 

“The long tail really hasn't been established yet, and the market has a lot more room to run,” Stein said. “As more people use stablecoins, when the GENIUS [Act] goes live, and we see more stablecoins come to market, it won’t just be a crypto-native thing.” 

When that happens, Stein thinks these assets will expand into a longer tail of fintechs, which will give tokenized cash and stablecoins a long runway to operate on. “That really establishes comfort with these assets and opens the door to [people being comfortable with] earning yield and treasuries.” 

In the long term, Stein is optimistic. “Eventually, I do think all assets will go onchain.” 

For BlackRock, the brainstorming and innovation on the front of digital assets will continue, Stein shared. “The openness has only increased since we launched a number of products, and now we’ve demonstrated that we can be successful.” 

When asked if we can expect BlackRock to launch any new products this year on the digital asset front, he simply nodded and replied, “You’ll see…no hints.”

Check out the next section for more details and the full episode.

For today’s episode, I interviewed  Max Stein, a director on the digital assets team at BlackRock, about how the firm translates crypto and tokenization ideas into actual products, and why tokenized cash still has a long way to run. Max, who previously spent four years at ConsenSys and invested at Sino Global Capital before joining BlackRock, explains how the firm's tokenization work actually accelerated after the FTX collapse, and why its BUIDL fund was designed to prove that tokenization could be commercial rather than just a proof of concept.

He walks through how BlackRock chose Securitize over other tokenization platforms, why stablecoins and tokenized money market funds are complementary as the payment and savings assets of crypto, and why the real growth driver for stablecoins will be non-crypto use cases. The conversation covers why DeFi exploits shook $15 billion out of lending markets and what that means for tokenized asset design, how AI agents may prefer onchain rails over traditional ones, and why privacy solutions will eventually be necessary for institutional scale.

This episode is sponsored by Securitize, the proven leader in tokenized funds, equities, and private markets. Discover more at securitize.io.

TIMESTAMPS

00:00 – Intro

01:18 – How Max defines tokenization and his role at BlackRock

01:40 – How BlackRock goes from idea to product in digital assets

03:16 – Regulatory environment and how it affects the pace of product development

05:21 – Stablecoins at BlackRock: reserve management and internal use

06:17 – Why BlackRock chose Securitize and how BUIDL was designed

07:54 – How the FTX collapse actually accelerated BlackRock's tokenization work

08:54 – Why tokenized cash is still the biggest opportunity

14:09 – The shift from private chains to public networks and the hybrid model

22:17 – Stablecoins as utility: programmable money, flash loans, and same-rail settlement

27:36 – His thoughts on DeFi exploits, contagion, and what it means for tokenized asset design

33:13 – How AI agents may prefer onchain rails and accelerate crypto adoption

38:50 – Final advice: small decisions shape whether a product scales or sits on a shelf

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