BlackRock Takes Tokenization to the Next Level with Ondo Partnership

BlackRock, the world's largest asset manager, has taken another step towards tokenization with its partnership with Ondo Finance via Intelligent Portfolios. This move allows investors to hold a single token representing a professionally constructed investment strategy, combining different assets on the blockchain.

While this may seem like a small change, it marks a significant shift in the industry. Most tokenization efforts so far have focused on individual assets, such as Treasury funds, private credit, and stocks. BlackRock's move indicates a new layer of tokenization: combining assets into investment strategies and putting the strategy itself onchain.

Asset managers like Pantera have described this shift as moving 'from single securities to onchain portfolios.' This change means investors can reduce the number of positions and rebalancing decisions they need to manage themselves.

Model portfolios, pre-built combinations of funds and other investments used by wealth managers, held about $9.8 trillion in assets in June. Tokenization could give asset managers another way to distribute these strategies. BlackRock itself described the Ondo partnership as 'tokenization creates new ways for portfolio strategies to be delivered through digital infrastructure.'