BlackRock, the world's largest asset manager, has moved tokenization past individual securities. Through a partnership with Ondo Finance, the firm has developed three "Intelligent Portfolios" — onchain investment strategies focused on high income, diversified growth and high growth — each packaged into a single transferable token that investors can hold instead of buying and rebalancing the underlying assets themselves.

The three portfolios were built by BlackRock specifically for Ondo. The structure matters more than it first appears. Mutual funds and ETFs have bundled investments into single products for decades, but an onchain portfolio carries properties traditional wrappers lack: it can move between wallets and platforms, its holdings are visible onchain, and it can potentially serve as collateral for borrowing or plug into other financial products.

Lisa O'Connor, BlackRock's global head of model portfolio solutions, framed the partnership as a distribution play. "Tokenization creates new ways for portfolio strategies to be delivered through digital infrastructure," she said in the announcement.

The addressable business is substantial. Model portfolios — pre-built combinations of funds and other investments used by wealth managers — held roughly $9.8 trillion in assets as of June, according to Broadridge. Tokenization gives asset managers an additional channel to distribute those strategies.

From single securities to onchain portfolios

Most tokenization activity to date has concentrated on individual assets: Treasury funds, private credit, stocks and ETFs. The BlackRock-Ondo products point to the next layer — combining those assets into strategies and putting the strategy itself onchain.

Crypto investment firm Pantera described the shift in a recent report as moving "from single securities to onchain portfolios." "For investors, the practical change is a reduction in the number of positions and rebalancing decisions they need to manage themselves," the firm's analysts wrote.

BlackRock is not alone in testing the model. In August, digital asset manager Bitwise introduced Automated Token Portfolios with Coinbase and a16z-backed Glider, allowing eligible non-U.S. investors to follow Bitwise-designed portfolios of tokenized stocks while keeping the individual assets in their own wallets. Glider's software automatically adjusts holdings to maintain target weights.

The two approaches differ mechanically. Ondo wraps portfolio exposure into a single transferable token. Bitwise leaves individual tokenized stocks in the investor's wallet while software manages allocation. Both point in the same direction: portfolio management itself becoming software operating directly on blockchain-based assets.

Broader building blocks

Tom Staudt, president and chief operating officer of ARK Invest, told CoinDesk tokenization could change not just how investors buy funds, but what can go into a portfolio in the first place. Traditional portfolio models were built when retail investors had access to a far narrower menu of assets — private equity, private credit and crypto were largely unavailable, international markets were harder to reach, and the fund universe itself was much smaller.

"It's all great to have AI tell you what a perfect portfolio is, but if you can't access the assets, it doesn't really matter," Staudt said. "Blockchain and tokenization is clearly going to open up funds, strategies, asset classes and jurisdictions that are not currently available for everyone."

Coupled with AI, software could eventually construct portfolios around an individual investor's goals, risk tolerance or tax situation, while tokenization makes the underlying assets actually purchasable and tradable.

Ondo has already sketched a more automated endpoint. In a June interview, John Hoffman, then newly appointed head of portfolio products at Ondo, said tokenization is following a path similar to ETFs, only faster. He envisioned autonomous software continuously monitoring markets and allocating capital through professionally managed portfolios that adjust to changing conditions.

"Our end state will be portfolios that are professionally managed, real-time and adjusting to market circumstances and data changes," Hoffman said.

Getting there requires more than tokenized stocks and funds. Hoffman said the industry first needs a broader universe of assets onchain, prime-brokerage infrastructure, and asset-management strategies that can execute natively on blockchain networks.

Infrastructure effects

Dan Romero, chief business officer at Stripe-backed blockchain Tempo, sees tokenization trailing stablecoins' disruption by a few years. Stablecoins put cash onchain; tokenization now puts more of the investable universe onchain. Combining the two, he argued, lets developers build entirely new financial products.

Romero compared the dynamic to the rise of specialized neobanks: once underlying infrastructure became easier to access, companies built products tailored to specific customers rather than recreating traditional banks. "All of that same infrastructure is now going to be available with tokenized assets and stablecoins that people are going to be able to build really interesting new financial experiences," he said.

The operational consequences for asset managers are twofold. Distribution shifts from proprietary platforms toward wallet-native delivery, and products from different firms become easier to combine into a single portfolio — changing both how managers compete and how they cooperate.

The first stage of tokenization was about getting individual assets onto blockchains. The next, as the BlackRock-Ondo experiment signals, is assembling those assets into portfolios that can be managed, rebalanced and transferred programmatically. How quickly that scales depends on the prerequisite infrastructure — broader onchain asset coverage, prime brokerage and natively executable strategies — that Hoffman and others identify as the bottleneck to watch.