Why BlackRock & Larry Fink Are Betting Big on RWA

Despite the uncertainty and volatility in the market, there is one incredibly exciting development happening right now, and I wanted to share it with you today! We’re seeing the rise of what could be one of the biggest opportunities at the intersection of crypto and traditional finance. A shift that will change the way we view investing, ownership and wealth creation! Tokenisation is the term being thrown around by Larry Fink, founder, CEO and chairman of the investment management firm BlackRock. The tokenisation of Real World Assets (RWA) unlocks the next step of financial evolution and the world’s largest institutions are taking notice. Larry Fink, backed by his $10 trillion asset management firm is proclaiming that RWA tokenisation represents the "next generation for markets."

So, why does this matter? Because for the first time in history, physical and financial assets (real estate, government bonds, fine art, intellectual property, etc) can be digitised, fractionalised, and traded seamlessly on the blockchain (no this is not NFTs). This innovation is dismantling the barriers that have long kept certain investments exclusive to high-net-worth individuals and institutions. Now, anyone with an internet connection can access a slice of assets that were once out of reach.

Over the years to come the potential of RWA tokenisation will, in my opinion, be exponential, driven by technological advancements, institutional adoption, and clearer regulations. The RWA narrative confirms that crypto and blockchain are finally no longer being considered fringe technologies; they are showing their potential to become the backbone of modern finance.

In this Newsletter, we will explore RWA tokenisation, why Larry Fink is betting on it, the opportunities it unlocks, and why this is shaping up to be the biggest financial narrative of 2025 and beyond.

Larry Fink on RWA

Larry Fink has long been a proponent of innovation in financial markets, but his recent focus on RWA tokenisation signals an interesting shift and a signal for me to pay attention. He has called tokenisation the "next generation for markets" and believes it will revolutionise finance by enabling instantaneous settlement, transparency, and efficiency. He has even urged the SEC to accelerate the approval of tokenised stocks and bonds, underscoring his belief that the future of finance depends on blockchain-based systems.

BlackRock has already taken steps into the tokenised asset space, launching the BlackRock USD Institutional Digital Liquidity Fund (BUIDL). This fund invests in tokenised treasuries and repurchase agreements, bringing traditional financial assets into the blockchain ecosystem. His endorsement of RWA is a clear indication that institutional finance is making a full-scale entry into the digital asset space.

What Are Real World Assets (RWA)?

In practice, this all sounds good. Larry Fink is on board, and BlackRock is taking opportunity bets in this sector. But what does RWA mean, and why does it matter?

Simply put, RWAs refer to tangible and intangible assets, such as real estate, commodities, bonds, equities, and even art. RWA allows these to be digitised and represented on a blockchain through tokenisation. This technology converts ownership rights into blockchain-based tokens, allowing fractional ownership, real time settlement, and transparent transactions.

For example, consider a high value commercial property in New York. Traditionally, investing in such an asset would require significant capital, limiting access to institutional investors only. With tokenisation, the property could be divided into thousands of tokens, allowing investors to buy and trade fractional ownership on digital marketplaces. This democratises access (both institutions and retail have equal opportunity) and enhances liquidity in very illiquid markets.

So, fractional ownership is cool and opens the doors to a flood of more diverse investor pools and funding types. But the additional aspects of RWA are epic as well. Tokenised RWAs can be used as collateral in decentralised finance (DeFi) applications. A tokenised corporate bond, for instance, could be integrated into smart contracts for lending and borrowing, unlocking new opportunities for both traditional and crypto native investors. If take this in the context of the New York commercial property mentioned above, the tokens (representing fractionalised ownership) of the high end property in New York can be locked into DeFi applications and generate further yield by borrowing against them as collateral.

The possibilities with tokenisation are honestly endless. Many legacy illiquid markets typically only have institutional access with ridiculously high minimum investments. Tokenisation opens the doors to a far bigger, more diverse, and deeper liquidity pool, making illiquid markets liquid.

Let's look at how this works in practice. To fractionalize a real-world asset, you would need to turn it into a financial instrument, typically done by creating a Special Purpose Vehicle (SPV) to hold the underlying asset (Essentially for legal compliance). Tokenisation is the process of representing ownership of financial instruments, such as shares or debts of the SPV, as tokens on a blockchain, allowing for digital purchase, self custody, easy transfers, and asset usage. So basically, the asset's value, ownership, and legal status are established off-chain. Then, these details are embedded into tokens, which are issued on a blockchain, providing a digital representation of the asset.

Since we love AI in this newsletter, imagine the enhanced potential of RWA combined with AI. AI optimizes the management of RWAs, analyzes creditworthiness for on-chain lending, and mitigates risks in real world tokenised assets. This is the ultimate team-up of the century. This will take Self-Driven and autonomous economies to another level!

RWA’s unlock opportunity

As mentioned above, RWA tokenisation unlocks illiquid markets. The benefits of accessing an untapped investor pool or space are limitless.

1. Enhanced Liquidity

Historically, assets like real estate and private equity have been illiquid, requiring lengthy transaction processes. Tokenisation breaks these down into smaller, tradable units, enabling near instant liquidity. Imagine being able to sell a fraction of a real estate investment as easily as selling shares in a publicly traded company.

2. Transparency and Security

Blockchain technology ensures that every transaction is recorded immutably, reducing fraud and eliminating opaque ownership structures. Investors can verify asset ownership, history, and value in real time, minimising risks associated with traditional finance.

3. Access to Previously Inaccessible Markets

Tokenisation lowers the barriers to entry, allowing retail investors to participate in markets once reserved for institutional players. Instead of needing millions to invest in a private equity fund, individuals could participate with as little as a few hundred dollars.

4. Instantaneous Settlement

Traditional settlement processes, particularly for bonds and securities, can take days due to intermediaries and regulatory checks. With tokenisation, transactions settle instantly, reducing counterparty risk and improving market efficiency.

5. Cost Reduction

Financial intermediation often comes with high fees. Tokenisation eliminates many of these inefficiencies by reducing reliance on banks, brokers, and other intermediaries, ultimately lowering costs for both issuers and investors.

It’s no wonder Larry Fink is all over this!

Why RWA Is the Biggest Narrative for 2025/2026

With the current institutional eyes on RWA, it’s certainly setting the stage for one of the biggest investment narratives for 2025/2026 and beyond. The value of RWA has done multiples since early 2024 and it continues to show robustness and strength throughout the market volatility we have seen over the past few weeks.

Just recently we have seen some pretty amazing partnerships between TradFi and Crypto based RWA protocols:

Firstly let’s look at Ondo Finance the current leading RWA project! Their partnership with BlackRock is specifically noteworthy! Ondo specialises in bringing traditional financial assets onto the blockchain, serving as a bridge between legacy finance and decentralised systems. Their collaboration means that trillions of dollars in institutional capital could soon flow into tokenised assets, supporting Larry Finks's initiative and conviction in the space. This is the first real and true institutional adoption that we are seeing in crypto outside of Bitcoin and arguably Ethereum and Solana.

What excites me the most about this partnership is that it signals a larger trend that presents a host of opportunities: the convergence of traditional finance (TradFi) and DeFi. By tokenising treasuries, corporate bonds, and other real world assets, BlackRock and Ondo are creating new financial instruments that combine the stability of traditional markets with the efficiency of blockchain.

Furthermore, at the recent RWA Summit hosted by Ondo Finance, we saw many incredible advancements. We saw some of the biggest names come together from both traditional finance and blockchain, unveiling groundbreaking initiatives designed to bridge the gap between these two worlds. One of the most exciting announcements was the launch of Ondo Chain, a new Layer 1 blockchain specifically built for institutional grade RWA tokenisation. This platform is set to boost how assets like stocks, bonds, and Treasuries interact with blockchain technology, providing a secure and compliant environment for large scale adoption. By utilising a permissioned validator network and an RWA backed staking mechanism, Ondo Chain provides a stable and regulatory compliant framework… this is big for institutional investments.

The summit also introduced Ondo Global Markets (Ondo GM), a platform designed to accelerate the integration of traditional assets into blockchain ecosystems. This move is expected to streamline inefficiencies in traditional finance, making investments more transparent, accessible, and efficient. Given the growing demand for tokenised assets, this initiative positions Ondo as a key player within the RWA sector. Adding to the significance of the event, major figures from BlackRock, PayPal, Franklin Templeton, and Morgan Stanley were in attendance, highlighting the growing interest from legacy financial institutions. One of the standout moments was a fireside chat with Caroline D. Pham, Acting Chairman of the CFTC, who spoke on regulatory frameworks and the role of blockchain in the evolving financial landscape. After all, Trump’s World Liberty Fi has been accumulating Ondo.

Overall, this got the bullish sentiment frothing for me. It’s not often we see such a perfect combination of legacy and emerging tech… right now we are blessed with two, the intersection of AI and traditional sectors and the intersection of RWA. Combine all three and we have the perfect storm for market efficiency.

To expand outside of Ondo we have also seen other projects capture significant traditional adoption, namely with the recent partnership between Chintai and R3 Sustainability. This collaboration is centred around tokenising a massive $795 million in real world assets, bringing transparency, efficiency, and liquidity to private markets. One of the biggest takeaways from this partnership is the first wave of tokenised projects, which includes major infrastructure and sustainability initiatives. These projects range from a $50M Workforce Housing expansion (with the potential to scale up to $150M) to a $165M Industrial Development Fund, a $300M Resource Efficiency Program, and a $180M Water Infrastructure Development initiative. By leveraging blockchain, these projects can speed up deal closures, provide real time transparency, and introduce liquidity to investments that were previously locked in rigid, illiquid structures.

It is becoming clear that As more institutions adopt tokenised assets, we’re witnessing the early stages of a financial revolution that will likely change the way we invest in and manage real world assets.

The Road Ahead

As we look toward 2025 and 2026, RWA tokenisation is set to become a defining trend in both traditional and crypto markets. Institutional adoption is ramping up, DeFi integration is expanding, and blockchain infrastructure is maturing. The fusion of these elements is creating a financial ecosystem that is more efficient, transparent, and accessible than ever before. Throw AI into the mix and we have a perfect ecosystem!

Larry Fink’s vision for tokenization, coupled with BlackRock’s strategic moves with Ondo Finance, makes it clear that RWAs are one of the biggest upcoming opportunities. These partnerships prove that the intersection of traditional sectors and blockchain represents a shift in how assets will be managed, traded, and owned.

While the market sits in its current state of uncertainty and disruption due to trade war risks, AI battles (DeepSeek) and Trump flexing his muscles, it is clear that the times presented before us are the opportunities we will be thankful for once things settle. If Trump’s previous Term is anything to go on we know he positions himself on the success of risk.

Key Takeaways:

• BlackRock’s Full-Scale Entry: With Larry Fink calling RWA tokenisation the "next generation for markets," BlackRock is leading institutional adoption, launching funds like BUIDL to bridge traditional finance and blockchain.

• Institutional Momentum is Exploding: Major players like JPMorgan, PayPal, and Morgan Stanley are embracing RWA tokenisation, making it one of the hottest narratives for 2025 and beyond.

• Tokenisation = Liquidity & Access: RWAs allow fractional ownership of assets like real estate, bonds, and commodities, unlocking new investment opportunities and enhancing liquidity in traditionally illiquid markets.

• Ondo Finance & Chintai Partnerships: Key RWA protocols are forming massive partnerships, with Ondo Finance launching Ondo Chain for institutional-grade tokenisation and Chintai partnering with R3 to tokenise $795M in real world assets.

• AI + RWA = The Ultimate Power Play: AI-driven credit analysis and risk assessment are accelerating RWA adoption, creating a new financial era where blockchain, AI, and TradFi merge.

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