• BlackRock CEO Larry Fink’s annual shareholder letter discusses the growth of Bitcoin and cryptocurrency usage in developing countries.
• Fink notes that tokenization of asset classes offers the prospect of driving efficiencies in capital markets, shortening value chains, and improving cost and access for investors.
• Despite this progress, Fink acknowledges the need for regulation in the digital assets industry due to elevated risks.
Overview
In an annual shareholder letter sent by BlackRock CEO Larry Fink, he discussed how digital assets have witnessed “very interesting developments” such as growth in bitcoin transactions in India, Brazil and parts of Africa. This is bringing down costs and advancing financial inclusion. He also talks about potential use cases for blockchain technology such as tokenization of stocks and bonds, but stresses the need for regulation due to elevated risks.
Growth Of Cryptocurrency Usage In Developing Countries
Fink highlights the growth of Bitcoin and cryptocurrency usage in India, Brazil and parts of Africa which are driving down costs and advancing financial inclusion. Specifically, Bitcoin Magazine has closely followed these advancements in Bitcoin adoption including a project called “Bitcoin Beach Brazil” as well as “Bitcoin Ekasi” in South Africa – all clear examples of increasing usage where sovereign digital money is needed most. Despite this progress however, the US lags behind with higher costs due to recent actions cracking down on large exchanges which led to collapse of banks providing services to these exchanges.
Tokenization Of Asset Classes
Fink goes on to talk about potential use cases with blockchain technology such as tokenization of asset classes which offers prospects like driving efficiencies in capital markets, shortening value chains, and improving cost & access for investors – something BlackRock is exploring more deeply with permissioned blockchains & tokenized stocks & bonds..
Elevated Risks & Need For Regulation
Although there has been a lot of progress made so far with digital assets industry over recent years , Fink acknowledges that there are still elevated risks involved which requires regulations across all areas from operational excellence standards to controls used throughout their business .
Conclusion
Overall , investing into digital assets can bring advantages like improved cost & access for investors but at same time involves certain amount risk which could be reduced through proper implementation regulations .