BlackRock CEO: War in Ukraine Could Accelerate Digital Currency Adoption

  • A global digital payment system can improve the settlement of international transactions and reduce the risk of money laundering, Fink said in a letter to shareholders.
  • The company filed an application to launch a blockchain ETF in January

The war in Ukraine could accelerate the adoption of digital currency, according to the CEO of the world’s largest asset manager.

BlackRock CEO Larry Fink wrote in a letter to shareholders published Thursday that Russia’s “brutal attack” on Ukraine has had, and will continue to have, a series of global ramifications.

Although several governments were already looking to take a more active role in digital currencies and define the regulatory frameworks within which they operate, Fink said, the war will cause countries to reassess their monetary dependencies.

“A carefully designed global digital payments system can improve the settlement of international transactions while reducing the risk of money laundering and corruption,” he wrote. “Digital currencies can also help reduce the costs of cross-border payments, for example when expatriate workers send their earnings to their families.”

Fink said that due to increased customer interest, BlackRock is investigating digital currencies, stablecoins and underlying technologies. US government agencies are also investigating various parts of the crypto space following President Biden’s executive order earlier this month focused on the “responsible development” of digital assets.

A BlackRock spokesperson declined to comment on future crypto-related products and services the company may consider offering.

BlackRock’s CEO has been sending mixed messages about crypto over the past year.

Fink said during an interview with CNBC in October that he thinks there is “a huge role for a digitized currency” and noted that his company is learning about the blockchain and crypto sectors. He did, however, say at the time that he was “probably more on the Jamie Dimon side”.

Dimon, the CEO of JPMorgan Chase, called bitcoin “worthless” that month during a virtual event hosted by the Institute of International Finance.

Fink had said on an earnings call last April that investors around the world, such as pension funds, insurance companies and registered investment advisers, were showing little interest in the space.

But BlackRock, which manages $10 trillion in assets, began allowing its Strategic Income Opportunities and Global Allocation mutual funds to invest in cash-settled bitcoin futures in January 2021.

Most recently, the company filed an application with the Securities and Exchange Commission (SEC) in January to launch the iShares Blockchain and Tech ETF.

The fund would track an index composed of companies involved in the development and deployment of crypto technologies in the United States and abroad.

The initial January 21 disclosure proposed that the ETF would go live 75 days after filing, signaling a potential launch next month.

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  • Ben Strack

    Ben Strack is a Denver-based journalist who covers macro and crypto-native funds, financial advisors, structured products, and the integration of digital assets and decentralized finance (DeFi) into traditional finance. Prior to joining Blockworks, he covered the asset management industry for Fund Intelligence and was a reporter and editor for various local Long Island newspapers. He graduated from the University of Maryland with a degree in journalism. Contact Ben by email at [email protected]

Sylvia B. Polson