In his 2026 annual shareholder letter, Larry Fink, CEO of BlackRock, makes a clear case: the financial system needs an upgrade. At the center of that shift is tokenization.
The â1996 Internetâ Parallel
Fink compares tokenization today to the internet in 1996. The implication is not immediate disruption, but gradual transformation.
Just as the internet didnât replace existing systems overnight, tokenization will first act as a bridge between traditional finance and emerging digital systems, upgrading the infrastructure itself:
- Fewer intermediaries reduce costs
- Transparency improves through shared ledgers
- Liquidity increases, especially for illiquid assets
From Legacy Systems to Tokenized Rails
Iâve seen first-hand how financial infrastructure that include banks, insurance, hedge funds, and global payment companies still runs on fragmented out-dated systems. Some of which are over 40 years old.
Tokenization offers a different model. By recording asset ownership on blockchain-based digital ledgers, assets like stocks, bonds, and funds can move faster, cheaper, and with greater transparency.
This transforms the full lifecycle of financial assets:
- Issuance becomes more efficient and programmable
- Trading becomes 24/7, 365 and global
- Settlement can happen in near real time
In this model, a regulated digital wallet doesnât just store cashâit holds tokenized securities, ETFs, and even fractional ownership.
Half the worldâs population carries a digital wallet on their phone. Imagine if that same digital wallet could also let you invest in a broad mix of companies for the long termâas easily as sending a payment. Tokenization could help accelerate that future by updating the plumbing of the financial systemâmaking investments easier to issue, easier to trade, and easier to access.
Larry Fink, Blackrock
Expanding Access Through Fractional Ownership
One of the most important implications is broader access to investing.
Tokenization enables fractional ownership at scale, allowing investors to own smaller portions of assets that were previously out of reach. This opens access to markets like private credit, real estate, or infrastructure. Tokenized equities also gives access to people globally, who might not otherwise have it.
The result is twofold:
- More people can participate in wealth-building opportunities
- Issuers can reach a broader, global investor base
Companies like Figure Technologies are already exploring tokenized equity, signaling where this is heading.
A Call for Regulation Unlock
For tokenization to scale, trust must be built into the system.
That requires:
- Clear investor protections
- Defined counterparty risk standards
- Strong digital identity frameworks
As Fink emphasizes, the real opportunity is not just modernizing finance, itâs enabling more people to participate in it globally.