BlackRock Wants a Blockchain Strategy for Aladdin, Its Investments Engine

A job posting reveals enterprise blockchain ambitions at the world’s largest asset manager. Public and private chains are up for evaluation, a source said.

Jun 18, 2021 at 5:05 p.m. UTC
Updated Sep 14, 2021 at 1:13 p.m. UTC

BlackRock, the world’s largest asset manager with almost $9 trillion in assets under management, is seeking to develop a blockchain strategy for its flagship portfolio management system, Aladdin, according to a job posting.

The director-level hire will “evaluate different blockchain protocols/platforms to explore solution alternatives.” Public and private chains are on the table, a source familiar with the posting said.

Aladdin (short for “Asset, Liability, Debt and Derivative Investment Network”) is BlackRock’s system for measuring risk and making trades. According to the job posting, Aladdin’s new director will investigate how blockchain could fit into the system.

Aladdin has been called “the tech hub of modern finance” for its prominence among portfolio risk management tools. Bitwise Chief Investment Officer Matthew Hougan said it is BlackRock’s “crown jewel.”

“Aladdin is the secret sauce that makes BlackRock tick, it’s a software tool that managers use to analyze, interpret and work with the capital markets,” Hougan said in an interview. 

BlackRock declined to comment on the scope of the position. A spokesperson provided the following statement:

“We’re hiring an engineering lead for distributed ledger technology to build out our expertise and execution capabilities in the distributed ledger technology space. While we have engineers working in the distributed ledger technology space today, this hire will allow us to increase our focus and capacity.”

Aladdin has evolved since the firm, which is now led by co-founder Larry Fink, was founded in 1988. Once exclusively an in-house product, it is now used by more than 250 clients.  

BlackRock’s blockchain roadmap

The job posting calls for candidates experienced in building “resilient” blockchain systems and integrating them into big-business tech stacks. That language suggests an interest in scalable enterprise blockchains, the closed cousins of open networks like Bitcoin and Ethereum.

Some Wall Street firms have run enterprise blockchains for trade finance, wholesale banking payments and even collateral-asset tokenization on the belief that distributed ledger technology is more efficient than centralized systems. JPMorgan is one example: It built a blockchain protocol called Quorum to host projects including JPM Coin and Liink.

Only approved parties such as other banks are allowed on private blockchains like JPMorgan’s. Well-known public cryptos are out of the picture, replaced instead by tokenized versions of traditional assets, like real estate or gold.

BlackRock wants its new engineer to help bolster the firm’s understanding of tokenization. 

“Crypto natives have been talking about tokenization and seeing how that could play a role in the future for years,” Hougan said, adding that banks and mega-managers are now beginning to follow suit. 

“What this seems to suggest is that it’s finally gotten too big to ignore for the largest institutions in the traditional financial world,” he said.

On the asset management side, BlackRock began trading bitcoin futures in the first quarter, its first foray into crypto trading.

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