Why BlackRock Is Optimistic About Blockchain But Not Bitcoin

BlackRock has no plans to launch a Bitcoin product, but is optimistic about the blockchain technology behind cryptocurrencies, according to one of its top executives.

“When it comes to the underlying blockchain technology, it is incredibly innovative and incredibly disruptive,” said Salim Ramji, global head of iShares and index investing at BlackRock. Financial news at the Barron’s Live event on June 22. “It removes friction, simplifies the transfer of value in a way that makes the underlying infrastructure of markets much more efficient for customers.”

Ramji’s bullish outlook for blockchain-focused investments comes after he told FN in December that the asset manager “has no current plans” to launch cryptocurrency ETFs despite bids from other companies to get Bitcoin products approved. US regulator.

One of the reasons Ramji held back was the “incredibly opaque” regulatory framework for cryptocurrencies.

READ Audience with Salim Ramji of BlackRock: ‘Investors love ETFs, not crypto stocks or even’

Ramji said at the Barron’s Live event, “We will only do this if it can meet the market quality levels that our customers and our regulators expect from us.”

However, the world’s largest asset manager does not rule out the possibility of playing with Bitcoin at any given time.

“The entire history of iShares has been about making investments more accessible and affordable. I think there will come a time that can also apply to cryptocurrencies, but we will always look at the long term rather than short-term trading when the time is right,” said Ramji.

“We continue to explore and research cryptocurrencies themselves, including bitcoin, around: are there ways to make them easier and more accessible for investors – just like we did with the bond market, the gold market and other markets around the world.”

In April, BlackRock launched its Blockchain and Tech ETF, which gives investors broad exposure to blockchain technology companies. The ETF, which has a portfolio of 33 companies, invests in Coinbase, Riot Blockchain and Galaxy Digital.

Despite being reluctant to launch products offering direct access to bitcoin and other cryptocurrencies, BlackRock became a $400 million fundraiser investor in April or Circle Internet Financial, the cryptocurrency-focused company that runs the stablecoin USD Coin. It is the second largest stablecoin with a turnover of around $56 billion according to CoinMarketCap.

BlackRock iShares chief says company is in no rush to launch crypto ETF

Other investors backing Circle, which plans to go public later this year through a special acquisition company, include Fidelity, Marshall Wace and Fin Capital.

BlackRock has entered into a broader strategic partnership with Circle that includes exploring the use of USD Coin in the capital market.

Ramji said that the partnership was “pretty good, despite the fact that many other not-quite-stable coins are facing the challenges they have been through.”

“We continue to consider various pilot projects and various mechanisms for experimenting with tokenization technologies,” he added.

To contact the author of this story with comments or news, email David Ricketts.

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