In a pronounced shift in the digital assets landscape, the world’s largest asset manager, BlackRock, signaled a stronger alignment with public blockchain networks, notably Ethereum, over permissioned alternatives. This key insight emerged during the “Beyond Bitcoin ETFs – What’s Next on the Institutional Roadmap?” panel at Coinbase’s State of Crypto Summit 2024 on Thursday.
BlackRock Doubles Down On Ethereum
Samara Cohen, the Chief Investment Officer of BlackRock for ETF and Index Investments, conveyed a decisive stance on the evolution of blockchain technology in financial markets. Cohen stated, “A few years ago we thought private permissioned blockchains would lead. We now realize public blockchains are better for the ecosystem.”
Her remarks at the summit reflect a broader consensus that has been quietly forming among traditional market participants who favor open-source platforms like Ethereum to avoid fragmenting liquidity and ensure wider, more efficient market participation.
Blackrock CIO of ETF & Index Investments @Samaraepcohen said today at the Coinbase event that permissioned blockchains have lost, & that traditional market participants are coalescing around open-source #Ethereum for tokenization, so as not to fragment liquidity
— matthew sigel, recovering CFA (@matthew_sigel) June 13, 2024
This pivot aligns with BlackRock’s recent initiative, having launched its first tokenization project on the Ethereum blockchain in March. In collaboration with Securitize, a US-based firm, BlackRock tokenized the “Institutional Digital Liquidity” fund. This move brought an initial liquidity of $100 million, denominated in USD Coin (USDC), to the platform. The fund primarily invests in cash, short-term debt securities, and US Treasury bonds, utilizing Ethereum’s architecture to facilitate its operations.
Hunter Horsley, CEO of Bitwise, further confirmed BlackRock’s shift towards public blockchains. Speaking separately, Horsley highlighted the definitive conclusion of the longstanding debate between the merits of permissioned versus permissionless blockchains, asserting, “This used to be a debate. Quietly, the will has been settled: permissionless.”
Anthony Sassano, a renowned angel investor, advisor and founder of The Daily Gwei commented: “Seriously read and digest this. An executive at BlackRock (the largest asset manager in the world) is telling you that the future is public blockchains – specifically, that the future is Ethereum! If this doesn’t make you bullish, nothing will.”
Panel discussions also featured insights from other financial leaders such as Sandy Kaul, Senior Vice President at Franklin Templeton, and Alesia Haas, CFO of Coinbase. The theme of the panel underscored the year 2024 as pivotal for the deeper integration of cryptocurrencies and traditional financial (TradFi) sectors through instruments like ETFs and the tokenization of assets.
The consensus among these financial leaders underscores a significant trend: the integration of blockchain technology into mainstream financial practices is not only increasing but is doing so through platforms that offer transparency, accessibility, and broad governance. Ethereum’s preference over permissioned blockchains by institutions like BlackRock marks a noteworthy development.
At press time, ETH traded at $3,522.
Featured image created with DALL·E, chart from TradingView.com
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