BlackRock has no plans to launch a bitcoin product, but is optimistic about the blockchain technology that underpins cryptocurrencies, according to one of its top executives.
“When it comes to the underlying blockchain technology, it’s incredibly innovative and incredibly disruptive,” said Salim Ramji, global head of iShares and index investing at BlackRock. Financial News at a Barron’s Live event on June 22. “It removes friction, it allows for an easier transfer of value in a way that makes the underlying plumbing of markets much more efficient for customers.”
Ramji’s bullish outlook for blockchain-focused investments comes after he said FN in December that the asset manager had “no current plans” to launch crypto ETFs, despite filings from other companies to get bitcoin products approved by the US regulator.
One of the reasons Ramji gave for holding back was the “incredibly opaque” regulatory framework around cryptocurrencies.
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Ramji told the Barron’s Live event: “We will only do this if he can meet the market quality levels that our customers expect from us and our regulators expect from us.”
However, the world’s largest asset manager is not ruling out bitcoin play at any given time.
“The whole history of iShares has been about making investing more accessible and affordable. I think there will be a time that may also apply to cryptocurrencies, but we will always look at the long-term view, as opposed to short-term trading when that time is right,” Ramji said.
“We continue to study and examine cryptocurrencies themselves, including bitcoin, around: are there ways to make it easier and more accessible for investors – just like we have done with the bond market, the gold market and other markets around the world.”
In April, BlackRock rolled out its Blockchain and Tech ETF, which gives investors broad access to companies involved in blockchain technology. The ETF, which has a portfolio of 33 companies, invests in Coinbase, Riot Blockchain and Galaxy Digital.
Despite an unwillingness to launch products offering direct exposure to bitcoin and other cryptocurrencies, BlackRock in April became an investor behind a $400 million fundraise or Circle Internet Financial – a company focused on the crypto that runs the USD Coin stablecoin. It is the second-largest stablecoin, with around $56 billion in circulation, according to CoinMarketCap.
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Other investors backing Circle, which plans to go public later this year through a special purpose acquisition company, include Fidelity, Marshall Wace and Fin Capital.
BlackRock has entered into a broader strategic partnership with Circle, which includes exploring capital market applications for USD Coin.
Ramji said the partnership has been “pretty well, despite many other not-quite-stable coins going through the issues they’ve been through.”
“We continue to look at different pilots and different mechanisms on how to experiment with tokenization technologies,” he added.
To contact the author of this story with comments or news, email David Ricketts