Even though BlackRock’s CEO doesn’t like how centralized exchanges make tokens, BlackRock’s CEO thinks that tokenizing securities is the next step for the financial market.
What’s Blackrock CEO Said?
The CEO of BlackRock, the world’s most significant asset management company, thinks that FTX failed because it made its own FTX Token, which was centralized and therefore against “the whole foundation of what crypto is.”
Larry Fink, chairman, and CEO of the $8 billion investment company said this at the New York Times’ 2022 Dealbook Summit on November 30. He also noted that, even though he thinks that FTX’s own-made token led to its demise, he believes that crypto and the blockchain technology that supports it will be revolutionary.
What About Centralized Exchange Tokens?
Larry Fink, the CEO of BlackRock, spoke at the 2022 DealBook Summit. The New York Times says so.
Over $57 billion of the $862 billion total crypto market cap comprises centralized exchange tokens like Binance companies and Crypto.com’s Cronos. Fink said he was still unsure about these tokens and thinks “most of these companies [that control the tokens] are not going to be around.”
Later in the interview with New York Times reporter Andrew Sorkin, Fink said that while he thinks Exchange Traded Funds (ETFs) led to the last change in investing, tokenization will lead to the next. He said:
I think the tokenization of securities will be the next generation of markets and securities.
He then went into more detail about some of the possible benefits of tokenization. He suggested that it would change the investing ecosystem because instead of trusting banks, “instantaneous settlement” would be possible on distributed ledgers that show every owner and seller of securities.
“Think about bonds and stocks that can be settled immediately, with no middlemen. We’re going to cut fees even more drastically,” he said.
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Fink said that BlackRock had put $24 million into FTX, but he wouldn’t say anything about claims that BlackRock and other venture capital firms, like Sequoia Capital, needed more research on FTX.
Right now, we can make all the decisions that it looked like there was some major wrongdoing. If you look at the Sequoias of the world, they’ve had great returns over a long time, and I’m sure they did their homework.
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Since 2020, BlackRock has been a significant investor in the cryptocurrency market. Its most recent move was announced on November 3, when it said it would manage the reserve fund for Circle, the company that made USD Coin (UDSC).
On September 27, it announced the start of an ETF that gives investors access to 35 companies that have something to do with blockchain.