BlackRock Embraces Ethereum: A Shift Towards Public Blockchain Networks

In a significant revelation at Coinbase’s State of Crypto Summit 2024, BlackRock, the world’s largest asset manager, demonstrated a clear preference for public blockchain networks, particularly Ethereum, over permissioned alternatives. This strategic shift was highlighted during the “Beyond Bitcoin ETFs – What’s Next on the Institutional Roadmap?” panel, where key insights were shared.

BlackRock’s Endorsement of Ethereum

Samara Cohen, the Chief Investment Officer of BlackRock for ETF and Index Investments, emphasized the company’s evolving perception of blockchain technology in financial markets. She stated, “A few years ago, we believed private permissioned blockchains would dominate. However, we now acknowledge the superiority of public blockchains for the ecosystem.”

Cohen’s remarks echo a growing consensus among traditional market players who are increasingly turning to open-source platforms like Ethereum to ensure market liquidity, efficiency, and broader participation.

BlackRock CIO of ETF & Index Investments @Samaraepcohen stated at the Coinbase event that permissioned blockchains are losing ground. Traditional market participants are converging around open-source #Ethereum for tokenization, avoiding liquidity fragmentation. 👍

This strategic pivot aligns with BlackRock’s recent foray into tokenization on the Ethereum blockchain, where it teamed up with Securitize to tokenize the “Institutional Digital Liquidity” fund. This initiative injected an initial liquidity of $100 million in USD Coin (USDC) into the platform, with investments in cash, short-term debt securities, and US Treasury bonds managed through Ethereum’s infrastructure.

Hunter Horsley, CEO of Bitwise, corroborated BlackRock’s shift towards public blockchains, emphasizing the clear preference for permissionless systems over permissioned ones.

Renowned angel investor and founder of The Daily Gwei, Anthony Sassano, expressed his excitement over BlackRock’s endorsement of Ethereum, underscoring the pivotal role public blockchains, particularly Ethereum, will play in the future of finance.

Insights from Financial Leaders

Additional panel discussions at the summit included perspectives from financial luminaries like Sandy Kaul from Franklin Templeton and Alesia Haas, Coinbase’s CFO. The overarching theme highlighted 2024 as a crucial year for the integration of cryptocurrencies and traditional financial sectors through instruments like ETFs and asset tokenization.

The collective viewpoint of these financial leaders points to a growing trend where blockchain technology, especially through transparent, accessible, and governance-oriented platforms like Ethereum, is gaining traction in mainstream finance.

As of the latest update, ETH was trading at $3,522.

Featured image created with DALL·E, chart from TradingView.com