BlackRock CEO's Annual Letter to Investors: Bitcoin Could Challenge the Dollar's Global Status, Tokenization Is the Financial Highway of the Future
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BlackRock CEO's Annual Letter to Investors: Bitcoin Could Challenge the Dollar's Global Status, Tokenization Is the Financial Highway of the Future
Tokenization is becoming a key force in reshaping financial infrastructure.
Navigating Web3 tides with focused insightsAuthor: Weilin, PANews
On March 31, Larry Fink, CEO of BlackRock—one of the world’s largest asset management firms—released his 27-page annual letter to investors. In it, Fink issued a rare warning: if the U.S. fails to rein in its ballooning debt and fiscal deficits, the dollar’s decades-long status as the “global reserve currency” could ultimately be overtaken by emerging digital assets such as bitcoin.
Bitcoin Could Undermine the Dollar’s Reserve Status
On page 20 of the report, Fink posed a thought-provoking question: “Could bitcoin undermine the dollar’s reserve currency status?”
He noted that for decades, the U.S. has benefited from the dollar’s role as the global reserve currency—but this position is not guaranteed forever. Since the “National Debt Clock” first lit up at Times Square in 1989, U.S. national debt has grown three times faster than GDP. This year alone, interest payments will exceed $952 billion—more than defense spending. By 2030, mandatory government expenditures and debt servicing are projected to consume all federal revenue, resulting in persistent structural deficits.
Federal debt held by the public as a percentage of GDP
While highlighting traditional financial risks, Fink also made clear he does not oppose the development of digital assets. “To be clear, I am certainly not anti-digital assets,” he wrote. “Two things can be true at once: decentralized finance is an extraordinary innovation, making markets faster, lower-cost, and more transparent. Yet, precisely this innovation could erode America’s economic advantage—if investors begin to view bitcoin as safer than the dollar.”
Reflecting on performance, Fink pointed out that BlackRock’s bitcoin ETF launch in the U.S. became the largest product debut in ETF history, surpassing $50 billion in assets under management in less than a year. IBIT now ranks as the third most attractive product in the entire ETF industry, behind only S&P 500 index funds. More than half of the demand came from retail investors, and three-quarters from investors who had never previously held an iShares product. This year, BlackRock expanded its bitcoin offerings into exchange-traded products (ETPs) listed in Canada and Europe.
Fink further emphasized that ETFs are not only achieving tremendous success in the U.S., but are also becoming key tools in advancing investment culture across Europe. Many European investors entering capital markets for the first time are doing so through ETFs, particularly iShares products. Currently, only one-third of individual European investors participate in capital market investments, far below the over 60% participation rate in the U.S. This leaves them missing out on growth opportunities offered by capital markets, while their savings accounts often lose value to inflation in a low-interest-rate environment.
To increase this participation rate, BlackRock is collaborating with several established institutions and emerging platforms across Europe—including Monzo, N26, Revolut, Scalable Capital, and Trade Republic—to lower investment barriers and improve local financial literacy.
Bullish on RWA, Calling Tokenization the 'Highway' of Finance’s Future
Extending from ETFs to today’s cutting-edge crypto technologies, Fink believes tokenization is emerging as a transformative force reshaping financial infrastructure.
“Today’s flow of global capital still relies on ‘financial plumbing’ built in an era when trading floors echoed with shouted orders and fax machines were considered revolutionary,” Fink wrote. Take the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which supports trillions of dollars in global transactions daily. Its operations resemble a relay race: banks pass instructions sequentially, meticulously verifying each step. In the 1970s, when markets were smaller and transaction volumes lower, this relay model made sense. But today, relying on SWIFT is as inefficient as sending an email through the postal service.
This system may have been reasonable in the past, but it is no longer efficient enough to support today’s globalized, digital financial demands.
In Fink’s view, tokenization will fundamentally change this inefficiency. If SWIFT is like postal mail, then tokenization is like email itself—assets can move directly and instantly, bypassing intermediaries entirely.
Fink went on to describe how tokenization could profoundly reshape the financial ecosystem—an implicit endorsement of the real-world assets (RWA) market. “It involves transforming real-world assets—such as stocks, bonds, and real estate—into digital tokens that can be traded online. Each token represents your ownership of a specific asset, like a digitized title deed. Unlike traditional paper certificates, these tokens reside securely on a blockchain, enabling instant buying, selling, and transferring without cumbersome paperwork or waiting periods. Every stock, every bond, every fund—every asset class—can be tokenized. Once achieved, it will revolutionize investing. Markets will no longer need to close; transactions that currently take days to settle could be completed in seconds. Thousands of billions of dollars currently frozen due to settlement delays would be immediately released back into the economy, fueling further growth.”
Perhaps most importantly, Fink said, tokenization will make investing more “democratic.” It enables democratization of access. Tokenization allows fractional ownership—dividing assets into countless small parts. This means high-barrier assets such as private real estate or private equity can become accessible to a much broader investor base, dramatically lowering entry thresholds.
Tokenization also enables democratization of shareholder voting. Owning shares entitles you to vote on corporate proposals. With tokenization, voting becomes easier because both ownership and voting rights are digitally recorded, allowing secure and frictionless participation from anywhere.
It also enables democratization of returns. Some investments offer significantly higher returns but are typically accessible only to large investors, partly due to legal, operational, and bureaucratic “frictions.” Tokenization removes these barriers, giving more people access to high-return opportunities.
However, Fink candidly acknowledged that widespread adoption of tokenization still faces critical technological and regulatory hurdles. “One day, I believe tokenized funds will become standard investor allocations, just like ETFs—but only if we solve one key challenge: identity verification.”
He explained that financial transactions require robust identity authentication. Apple Pay and credit cards seamlessly authenticate tens of billions of transactions daily. Traditional trading platforms like the New York Stock Exchange (NYSE) and MarketAxess can do so when buying and selling securities. But tokenized assets will bypass these conventional channels, necessitating an entirely new digital identity verification system.
“It sounds complex, but the world’s most populous country—India—has already achieved this. Today, over 90% of Indians can securely verify transactions using just their smartphones,” Fink noted.
In this annual letter, Fink also reflected on the historical evolution of capital markets, underscoring their vital role in driving societal prosperity and helping individuals build wealth through investing. He stressed the need for continued financial innovation to bridge the gap between public and private markets, emphasizing the importance of expanding investment opportunities—especially enabling everyday investors to access asset classes once reserved for the wealthiest.
While acknowledging widespread economic anxiety today, Fink sought to reassure investors that such periods are not unprecedented. As history has shown, resilience and the power of capital markets will ultimately restore stability.
Overall, Larry Fink’s annual letter serves both as a warning about the fragility of the dollar’s global reserve status and as a forward-looking vision for the future of finance. From tokenization reshaping capital markets to the bottleneck of digital identity systems, Fink exposes the flaws in the current system and points toward new directions enabled by technological and institutional innovation.
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