Benefits of Asset Tokenization

This is big news. Tokenization is fast becoming the next battleground for financial infrastructure. Goldman Sachs and BNY Mellon just made one of the boldest moves yet. Tokenization transforms real-world assets into digital tokens - unique, programmable representations of value that can be transferred, tracked, and embedded into automated financial workflows. Goldman Sachs and BNY Mellon are turning traditional money-market funds (MMF) into digital tokens. These funds - a $7.1 trillion global market managed by firms like BlackRock, Fidelity, and Federated Hermes - are commonly used by companies and asset managers to hold short-term cash in safe, interest-earning instruments like Treasury bills and commercial paper. But behind the scenes, they still run on decades-old infrastructure, full of manual steps, cut-off times, and delayed settlements. Tokenization changes that. 𝗛𝗼𝘄? By bringing the same speed, transparency, and automation we expect from modern payments and applying it to financial instruments that haven’t evolved in decades. ·      Instant settlement: Instead of waiting hours (or days) for trades to clear, tokenized assets can settle almost instantly - 24/7, without cut-off times. ·      Programmability: Rules and logic (e.g., eligibility checks, compliance constraints) can be embedded directly into the token - reducing manual oversight. ·      Fractional ownership: Investors can hold smaller, more flexible portions of a fund, which is hard to do in traditional structures. ·      Real-time tracking: Every transfer or ownership change is recorded transparently on a blockchain, improving auditability and risk management. ·      Easier collateralization: Tokenized fund shares can be pledged as collateral or moved between counterparties far more efficiently - a big advantage in treasury and liquidity management. 𝗛𝗼𝘄 𝘁𝗵𝗲 𝗽𝗮𝗿𝘁𝗻𝗲𝗿𝘀𝗵𝗶𝗽 𝘄𝗶𝗹𝗹 𝘄𝗼𝗿𝗸: ·      BNY Mellon will distribute tokenized money-market funds to institutional clients via LiquidityDirect - its cash management platform that helps treasurers and asset managers invest short-term liquidity. ·      Goldman Sachs will record and track ownership of the fund tokens on its private blockchain, providing speed, traceability, and operational efficiency. ·      The offering will support tokenized versions of funds managed by major players like BlackRock, Fidelity, and Federated Hermes. 𝗪𝗵𝘆 𝗻𝗼𝘄? The new U.S. Genius Act gives legal clarity for stablecoins and tokenized assets -removing regulatory uncertainty and unlocking tokenization across mainstream finance. 𝗪𝗵𝗮𝘁’𝘀 𝗻𝗲𝘅𝘁? This could reshape expectations around liquidity, treasury operations, and how financial assets are managed and settled. Custodians and asset managers will need to adapt. Tokenized Treasuries, equities, and real estate are already being tested. Opinions: my own, Graphic source: CNBC 𝐒𝐮𝐛𝐬𝐜𝐫𝐢𝐛𝐞 𝐭𝐨 𝐦𝐲 𝐧𝐞𝐰𝐬𝐥𝐞𝐭𝐭𝐞𝐫: https://lnkd.in/dkqhnxdg

UPI proved something powerful. When you make a system simple, trusted, and low friction, adoption follows and inclusion becomes real. India should now bring that same thinking to investing and asset ownership. That is why I raised the need for an Asset Tokenization Bill in Parliament. Asset tokenization is one of the most significant technological financial innovations of this century. It can convert large real world assets into smaller digital units, making ownership and investing more inclusive. For a middle-class household, the realistic investment avenues are still limited. Beyond a savings account, mutual funds, or fixed deposits, many quality assets remain out of reach because the ticket size is too high and the exit is too difficult. Tokenization can change that by enabling fractional ownership in assets that were previously accessible only to large investors. Real world assets such as real estate projects, infrastructure projects, commodities, and intellectual property can be converted into tradeable digital tokens, allowing ordinary investors to participate in value creation with simpler entry and exit. This is especially relevant in India because households have a strong cultural affinity to real estate and precious metals like gold and silver, and a large share of household wealth sits in these asset classes. Tokenization directly matches that preference by using blockchain technology to make these investments more accessible, tradeable, and transparent. The biggest game changer is instant liquidity in assets that have traditionally been illiquid. A common investor should be able to buy and sell without excessive broker fees or the usual registry and property dealer hassles. When transactions become transparent and simpler, intermediaries reduce, transaction costs reduce, and a middle-class investor is not forced to keep capital locked up simply because the asset is hard to exit. Of course, this must be done responsibly. India needs clear legislation, strong investor protection, a robust regulatory sandbox, and regulatory clarity so innovation grows within a safe framework. If we get the framework right, we expand participation, deepen markets, and keep more capital and innovation building in India. What should be non-negotiable in an Indian asset tokenization framework from day one? #Innovation #FinTech #Tokenization #Investing #DigitalTransformation #CapitalMarkets #Parliament  #Blockchain      

Tokenized deposits explained 👇    What are tokenized deposits, and what’s your take on this method of payment?    🪙 Tokenized deposits are a new and revolutionary concept in the financial ecosystem. They represent traditional bank deposits as digital tokens on the blockchain network and can create faster settlement of value transfers between accounts.     The top benefits of tokenized deposits are programmability, efficiency, and transparency.    → Similar to other blockchain assets, tokenized deposits can be configured to be used only under specific terms or conditions using smart contracts. That programmability ensures that digital money is only used for its intended purpose, providing greater control and customization over transactions.     → Tokenized deposits can help bypass the manual verification processes of traditional banking, due to a reduced reliance on intermediaries. Ultimately that can lead to cost-saving and increased operational efficiency for banks and financial institutions.    → Blockchain technology provides a transparent and immutable record of transactions. This is especially useful for financial entities as it enhances auditing capabilities, regulatory compliance, and risk management through new digital audit tools.     One example of where this can make a difference is real estate 🏠    In a real estate transaction, a buyer can use tokenized deposits to secure a property and initiate the payment process. Smart contracts can take it from there, automating the remaining transaction steps to trigger funds immediately once predefined conditions are met — in this case that could be something like the transfer of property title.    This would minimize the need for escrow services as funds could be automatically released to the seller, reducing transaction cost and settlement time. That’s good for all parties involved.    There are other promising use cases being explored as well, particularly as they relate to cross-border payments.    👉 What’s your take on tokenized deposits? Would love to hear from you.

🔵 The Real World Asset Tokenization Boom: $35.8B and Accelerating 🚀 While Stablecoin surging c. 50% YoY to ~$300B continues to dominate 2025 headlines, Real World Assets (which include tokenized money market funds) more than doubled to $35.8B (↑125% YoY). Together, they represent over $335B in tokenized `assets`—and the how and where reveals the real story about institutional blockchain adoption. 📍𝐂𝐚𝐭𝐞𝐠𝐨𝐫𝐲 𝐆𝐫𝐨𝐰𝐭𝐡 𝐓𝐞𝐥𝐥𝐬 𝐚 𝐌𝐚𝐭𝐮𝐫𝐚𝐭𝐢𝐨𝐧 𝐒𝐭𝐨𝐫𝐲: • Private Credit: +91% to $18.8B (still 52.5% of market)  • US Treasury Debt: +126% to $9.2B (MMFs proving product-market fit)  • Commodities: +194% to $3.1B (tokenization beyond financial instruments)  • Institutional Alternative Funds: +672% to $2.7B (sophisticated capital entering the tokenization space) What's changed in 2025? The top 3 categories dropped from 93.9% to 86.7% of total RWA market share. This is diversification into a maturing asset class infrastructure. 📍 𝐓𝐡𝐞 𝐓𝐚𝐥𝐞 𝐨𝐟 𝐓𝐰𝐨 𝐀𝐫𝐜𝐡𝐢𝐭𝐞𝐜𝐭𝐮𝐫𝐞𝐬: The network data from RWA.xyz reveals a critical distinction in how institutions are approaching tokenization: 𝐑𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐞𝐝 𝐑𝐖𝐀𝐬 (𝐮𝐬𝐢𝐧𝐠 𝐁𝐥𝐨𝐜𝐤𝐜𝐡𝐚𝐢𝐧𝐬 𝐨𝐧𝐥𝐲 𝐟𝐨𝐫 𝐑𝐞𝐜𝐨𝐫𝐝-𝐊𝐞𝐞𝐩𝐢𝐧𝐠):  • Canton Network: $372.7B across 8,460 assets (95.2% market share)  • Provenance: $13.9B (the Figure Technologies Blockchain – 3.56% market share) • Purpose: Immutable records, legacy custody systems 𝐃𝐢𝐬𝐭𝐫𝐢𝐛𝐮𝐭𝐞𝐝 𝐑𝐖𝐀𝐬 (𝐁𝐥𝐨𝐜𝐤𝐜𝐡𝐚𝐢𝐧𝐬 𝐟𝐨𝐫 𝐅𝐮𝐥𝐥 𝐎𝐧-𝐂𝐡𝐚𝐢𝐧 𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭):  • Ethereum: $11.8B across 303 assets (64.2% market share)  • BNB Chain: $1.6B (↑99.56% in 30 days! – 8.53% market share)  • Solana: $757M across 88 assets (4.14% market share) Purpose: Transfer, custody, programmability, composability 📌 𝐖𝐡𝐲 𝐓𝐡𝐢𝐬 𝐌𝐚𝐭𝐭𝐞𝐫𝐬: Stablecoins proved crypto-native payment rails work at scale. Now RWAs are proving the same for yield-bearing assets, lending, and complex financial instruments. Canton's dominance shows institutions are comfortable with blockchain as a "source of truth" layer. But Ethereum's leadership in distributed RWAs—where assets are actually transferable and composable on-chain—signals where the real transformation is happening. We're watching two parallel infrastructures emerge: one for institutional record-keeping at scale, another for genuinely programmable, liquid, interoperable assets. The 672% growth in Institutional Alternative Funds and BNB Chain's near-doubling in 30 days suggests the distributed model is reaching an inflection point. If stablecoins were 2025's proof of concept, RWAs are 2026's infrastructure play. Together, they're rewriting the rails of global finance especially at the institutional level. What's your take? Is blockchain adoption settling into incremental record-keeping upgrades, or are we witnessing the early stages of a deep capital markets transformation that will take off in 2026? #RWA #Tokenization #Blockchain 

The Time for Tokenization in Capital Markets is Now 1. Mass Adoption Is Set - DLT and tokenisation have moved from pilot projects to large-scale, live use cases. J.P. Morgan’s Kinexys has processed over $1.5T in tokenised transactions 2. Efficiency Across the Lifecycle - From issuance to settlement, tokenisation reduces costs by up to 60% and enables near-instant settlement (T+0/T+1), improving capital efficiency and reducing risks 3. Live Market Proof Points - UBS, Asian Infrastructure Investment Bank (AIIB), BlackRock, and Franklin Templeton have issued and scaled tokenised bonds and funds—showing that tokenization is no longer experimental, but mainstream. 4. Hybrid Future - The future market will be a mix of banks, non-banks, and digital-native firms collaborating under clear regulation to ensure both innovation and stability. 5. Call to Action - Legal clarity, interoperability, and scalable settlement with tokenised money are the next steps. The building blocks are here; what’s needed now is coordinated execution. Real Life Example - Think about streaming movies. Just a decade ago, you had to buy or rent DVDs. Streaming made access instant, cheaper, and easier—without changing the essence of the film. Tokenisation is doing the same for financial assets: faster, cheaper, and more accessible—without changing the underlying value. Why It Matters - Capital markets underpin global growth. By unlocking trillions in efficiency, reducing risks, and enabling broader investor participation, tokenization isn’t just a tech upgrade—it’s a structural shift in how finance operates. Great work GFMA, ASIFMA, ISDA, Institute of International Finance, Global Blockchain Business Council (GBBC), Global Digital Finance, Financial Services Forum, Bank Policy Institute, Boston Consulting Group (BCG), Sullivan & Cromwell LLP, Ashurst

Real-World Asset Tokenization: The Game Changer That’s Bridging the $2.5 Trillion Trade Finance Gap Real-world asset #tokenization (RWAT) has the potential to revolutionize trade finance by making it more accessible, efficient, and inclusive. By tokenizing #tradefinance assets, new #investment opportunities can be unlocked, contributing to narrowing of the $2.5 trillion global trade finance gap. Project Guardian demonstrated the viability of asset-backed tokenization, showcasing its potential to enhance liquidity and investor access. Tokenizing trade #assets converts them into transferable instruments, offering unparalleled #liquidity and accessibility to investors. This #innovation enables a broader investor base to participate in #financing global trade. Middle market enterprises (MMEs), often underserved in traditional finance, represent a significant opportunity for investors. Tokenization offers a pathway to provide #capital to this segment, especially in fast-developing regions like the Middle East, Asia, and Africa. Trade finance assets, though underinvested, offer strong risk-adjusted returns. They exhibit low #default rates and high #recovery rates, making them attractive yet #underutilized by #institutional investors. The upcoming Basel IV #regulations incentivize banks to adopt #blockchain-based originate-to-distribute models. Tokenization helps banks derecognize assets from their balance sheets, reducing regulatory capital requirements and enhancing operational efficiency. Demand for tokenized assets is expected to soar, with 69% of buy-side firms planning to invest in tokenized assets by 2024. The market for tokenized trade finance assets could grow to represent 16% of the total tokenized asset market by 2034, highlighting its vast potential. The successful scaling of tokenization in trade finance requires collaboration between banks, investors, #technology providers, and regulators. Public-private partnerships will be crucial in establishing a stable and #interoperable #digitalasset ecosystem. Investors are encouraged to participate in pilot programs, while banks should collaborate to develop industry-wide tokenization utilities. Finally, Project Dynamo exemplifies how tokenization can address trade complexity. By using digital trade tokens (DTTs), Project Dynamo streamlines financing for SMEs across supply chains, demonstrating the transformative power of tokenization. These above underscore the #transformative potential of #RWAT in reshaping global trade finance and the broader financial landscape. Now is the time for stakeholders across the financial ecosystem to act and capitalize on this unprecedented opportunity.

The Tokenized Finance Flywheel Is Here The financial system is entering a new era — one where money, assets, and value exist as digital tokens moving seamlessly across programmable networks. What once felt like theoretical innovation is now rapidly materializing into a functioning ecosystem — a tokenized finance flywheel that’s spinning faster than many expected. 🔹 From Stablecoins to Tokenized Deposits It all starts with money — and stablecoins are leading the charge. With a combined market cap nearing $270 billion, stablecoins are now the largest and most mature form of tokenized money. Regulation is catching up, too: the EU’s MiCA and the U.S. GENIUS Act are setting clearer frameworks for compliant issuance and usage. What began as a crypto-native experiment is now evolving into institutional-grade infrastructure. Meanwhile, tokenized deposits are gaining traction as banks test blockchain rails for traditional money. More than five global banks — including HSBC, BBVA, J.P. Morgan, Citi, and Deutsche Bank — have launched pilots or limited rollouts. While these are still small-scale, they mark a crucial shift: regulated money moving on tokenized systems. 🔹 CBDCs: Fragmented Momentum Central bank digital currencies (CBDCs) present a more fragmented picture. Over ten countries have gone live, and more than 90% of central banks are exploring them. However, the direction differs by region — Europe is actively developing a Digital Euro, while the U.S. has cooled its stance, effectively banning a federal CBDC. The UK, too, is treading carefully. It’s a reminder that while private innovation surges ahead, public policy still hesitates. 🔹 The Other Side of the Flywheel: Tokenized Assets As tokenized money gains ground, the flywheel turns toward tokenized real-world assets (RWAs) and virtual assets (VAs) — bringing liquidity, transparency, and programmability to everything from bonds to private credit. Funds and bonds are leading this wave. Tokenized funds surpassed $3 billion in AUM, with institutions like BlackRock expanding rapidly in 2024. At the same time, Hong Kong and Singapore have issued digital bonds backed by robust regulatory support, while MiCA provides the EU with a clear framework for tokenized securities. The commodities market, too, is catching up. Offerings like HSBC’s Gold Token signal growing institutional confidence, with total market size hitting $1 billion. Private credit — an often opaque asset class — has seen $10 billion in tokenized demand, making access faster and settlement times shorter. 🔹 Licensing the Future Finally, virtual asset regulation is maturing to support mass adoption. Countries across Asia, Europe, and the Middle East are introducing licensing regimes that bridge traditional finance (TradFi) and decentralized finance (DeFi), enabling banks, brokers, and fintechs to legally participate in tokenized ecosystems. #Fintech #DeFi #crypto

Tokenization of assets and its importance… Tokenization of assets refers to the process of representing real-world assets, such as real estate, stocks, or commodities, as digital tokens on a blockchain or distributed ledger system. These tokens are often created using smart contracts and are divisible, transferable, and programmable. There are several reasons why tokenization of assets is important: ✅Fractional Ownership: Tokenization allows assets to be divided into smaller, more affordable units, enabling fractional ownership. This opens up investment opportunities to a wider range of investors who may not have had access to traditional asset classes due to high barriers to entry. ✅Liquidity: By tokenizing assets, it becomes easier to buy, sell, and trade them on digital asset exchanges, providing liquidity. This liquidity can reduce the time and costs associated with traditional asset transactions. ✅Transparency and Security: Blockchain technology provides transparency by recording all transactions on a distributed ledger, which enhances trust and reduces the risk of fraud. Smart contracts can also automate various processes, such as dividend payments and compliance requirements, further increasing security and efficiency. ✅Global Accessibility: Digital tokens can be accessed and traded 24/7 from anywhere in the world with an internet connection. This global accessibility removes geographical barriers and expands investment opportunities for both investors and asset issuers. ✅Efficiency and Lower Costs: Tokenization streamlines the issuance, trading, and management of assets by leveraging blockchain technology and smart contracts. This reduces the need for intermediaries, paperwork, and manual processes, leading to lower costs and faster transactions. Overall, tokenization of assets has the potential to democratize investing, improve market efficiency, and unlock trillions of dollars of currently illiquid assets, thereby reshaping the financial landscape. #tokenisation #smartcontracts #bitcoin #investors #technology #digitalassets #aif #tokens #wealth

Real-world asset tokenization seemed to be dead. Then it grew 380% in a couple of years. I’ve just published a new article on Forbes: how tokenization went from graveyard to crypto's second-fastest growing sector. The landscape of RWAs (financial instruments): → 2022: $5 billion → 2025: $24 billion → 2030 projection: $16 trillion (by BCG) → 2034 projection: $30 trillion (by Standard Chartered) And if you look at the chart below which combines all kinds of assets (including real estate), the numbers are even crazier. So - what changed? Everything. The early failures taught us what not to do: St. Regis Aspen tokenized in 2018, peaked day one, then died. Harbor's student housing got blocked by lenders. By 2021, less than 10% of tokenized real estate had any trading volume. Three killers: no legal recognition, tiny investor pools, zero liquidity. Then the infrastructure caught up: → Dubai synced token transfers directly to land records → Japan created clear security token rules → Chainlink Labs launched real-time pricing across 37 chains → Goldman Sachs and BlackRock moved in Last month, Mitsubishi UFJ bought a ¥100 billion tower in Osaka. The entire 30-story building is becoming tokens - retail investors can buy fractions with settlement in seconds and full legal weight. The pattern is becoming clearer to the West and to the East: Every asset staying offchain becomes less liquid, less accessible, more expensive to trade. One of my favorite examples: Project Mocha on Scroll, tokenizing individual coffee trees in Kenya. Investors fund farmers, share revenue. Same model emerging for solar farms, shipping containers, music royalties. Today's $24 billion represents 0.01% of global wealth. We haven't even started. Read the full article, linked in the comments. What would you tokenize - if legal and technical barriers disappeared tomorrow? ♻️ Share with anyone who thinks RWAs were dead

I was watching the fireplace last night with my wife, letting the day slow down, when a simple thought clicked (yes I think about these things on Saturday night) Most assets don’t need blockchains. Markets do. Tokenized money market funds help explain why. Here’s the same idea using a dimensional way of thinking that makes it feel obvious. Start in one dimension Imagine a money market fund held inside a single institution. One balance sheet. One jurisdiction. One administrator. One settlement path. In this world, a traditional ledger works fine. Ownership is clear. Transfers are rare. A blockchain doesn’t unlock much value because coordination is simple. Demand isn’t the problem. Plumbing already works. Move to two dimensions Now add more parties. Multiple investors. Custodians. Fund administrators. Distribution platforms. Units move between accounts. State has to stay consistent across systems. Reconciliation appears. Cutoff times matter. Errors creep in. Tokenization starts to help, but mostly around efficiency. The gains are real, but incremental. Move to three dimensions Now add time, reuse and conditionality. The fund trades intraday. Units are pledged as collateral. Positions are reused across margin and liquidity workflows. Settlement timing affects downstream obligations. The asset is no longer just held. It’s in motion. At this point, shared state becomes valuable. Without it, institutions slow everything down to manage risk. This is where tokenization stops being a wrapper and starts becoming infrastructure. Move to four dimensions Now add jurisdictions and regulatory domains. Different eligibility rules. Different settlement systems. Different regulatory clocks. Different reporting obligations. This is where traditional plumbing breaks. Demand for safe yield can be enormous, yet value stays trapped because no single system can synchronize ownership, availability and constraints across participants. Tokenization matters here because it provides a shared coordinate system across these dimensions. The core insight Tokenization doesn’t create value by making funds digital. It creates value by allowing them to exist coherently across higher dimensions of coordination. Assets that live in one or two dimensions don’t benefit much. Assets that live in three or four dimensions cannot scale without shared state. Why money market funds are moving on chain? A tokenized money market fund isn’t about novelty. It’s about enabling continuous access, faster settlement, collateral mobility and consistent visibility across institutions and jurisdictions. That’s why this asset class is gaining traction with regulated firms. Assets get tokenized when their economic value is constrained by dimensional complexity, not demand. Blockchains matter when markets outgrow the systems coordinating them.