Tokenization: Real-World Assets on the Blockchain

Imagine being able to trade shares of any asset—a company, a private-equity fund, a Picasso painting—instantly and securely with just a few clicks. Imagine then being able to offer those shares as collateral or loan them out in exchange for interest payments.

That's the ambitious vision of tokenization evangelists. They see a world in which any asset is digitally represented, sliced into smaller units, and traded on blockchains with greater speed and efficiency. For now, that vision remains far from realized—especially the Picasso-trading—and bringing it into existence will require convincing regulators that the benefits are worth the risks.

Even so, major financial institutions and market exchanges are already making significant moves in this direction. The parent companies of the New York Stock Exchange (NYSE) and Nasdaq®, along with the firm that processes most U.S. securities transactions, have taken steps that would eventually place trillions of dollars of U.S. equities on blockchains.

Meanwhile, BlackRock (BLK), JPMorgan Chase (JPM), and Franklin Templeton are among the big fund issuers who have already tokenized billions of dollars in financial assets, mostly short-term U.S. Treasuries, with plans to keep going. In all, there are about $35 billion in tokenized assets on blockchains, according to data from Token Terminal, including $5 billion in tokenized commodities and nearly $1 billion in tokenized stocks. The rest are tokenized money market funds (MMFs), deposits, etc.

BlackRock CEO Larry Fink has said "every stock" and "every bond" could eventually be tokenized, making markets faster, more efficient, and cheaper. Consulting firm McKinsey has estimated that the total value of tokenized assets will reach $2 trillion–$4 trillion by 2030. Standard Chartered has projected $30 trillion by 2034.

Legacy financial institutions and market exchanges are moving to adopt core blockchain technology and connect more directly with the crypto ecosystem. As of March 2026, these are some of the most significant recent developments in tokenization:

• In March 2026, the U.S. Securities and Exchange Commission (SEC) granted the Nasdaq permission to test a way of allowing investors to choose, on a trade-by-trade basis, whether to settle trades in traditional digital form or on a blockchain. Under the plan, the Nasdaq will work with the Depository Trust Co. (DTC), a subsidiary of Depository Trust and Clearing Corp. (DTCC), which is the central clearing and settlement hub for U.S. stocks and fixed income products, as well as the central securities depository for U.S. markets.
• In December 2025, the SEC gave permission for the DTCC—which processes hundreds of millions of transactions annually—to begin handling some tokenized transactions. Following the SEC's nod, it will handle transactions of tokenized versions of a limited set of frequently traded securities, including exchange-traded funds (ETFs) that track major stock indexes, U.S. Treasuries, and bonds. The company said its goal is to put its entire depository—nearly $100 trillion in securities—onto the blockchain.
• The NYSE is seeking regulatory approval to build a separate, blockchain-based platform for around-the-clock trading and on-chain settlement of tokenized stocks and ETFs. Trades would settle instantly rather than taking one business day, investors could place orders in dollar amounts rather than whole shares, and the system would support stablecoin-based funding. The platform could launch by the end of 2026.
• In March 2026, NYSE parent company Intercontinental Exchange (ICE) announced a strategic investment in and partnership with crypto exchange OKX. Tokenized NYSE-listed equities could be offered to OKX customers as soon as the second half of 2026.
• In March 2026, Nasdaq (NDAQ) announced a partnership with crypto exchange Kraken to create a system for issuing and trading tokenized equities and other exchange-traded products, or ETPs. Under the deal, Kraken will offer the tokenized assets to its customers in Europe and other international markets.
• In November 2025, Securitize and Binance announced that BlackRock's tokenized MMF could be used as off-exchange collateral on Binance, a crypto-native exchange. This will enable institutional investors to use the yield-bearing product as collateral for trading crypto derivatives.
• In February 2026, BlackRock announced it would bring its offering onto UniswapX, a platform operated by decentralized exchange Uniswap, where it can be bought and sold by institutional traders.
• In December 2025, JPMorgan launched a tokenized MMF on the Ethereum blockchain. Open only to qualified individuals, the fund offers quick settlement and requires a minimum investment of $1 million. It invests exclusively in U.S. Treasuries and fully collateralized repurchase agreements.

In financial markets, tokenization refers to creating a unique digital representation of a real-world asset (RWA), usually recorded on a blockchain—an immutable digital ledger. Technically, this makes the tokens—essentially digital certificates—easier and faster to trade, transfer, lend, and borrow.

So far, financial institutions have focused on tokenizing stocks, bonds, and money market funds, but just about anything can be tokenized, including art, real estate, commodities, intellectual property, and data.

• Structure the asset: Place the asset into a legal wrapper such as a special purpose vehicle or registered fund. The token then represents a claim on the wrapper, not direct ownership of the underlying asset.
• Create and issue the token: The token itself is software on the digital ledger. Key information it should record about the asset includes how interest or dividends are handled, the rights of token holders, and ownership.
• Secure the RWA: The underlying asset is typically secured by a third party, particularly if it is a physical asset. This mirrors the current system for securities ownership in the United States, where most stock certificates are held by DTCC.
• Tokens are distributed: Tokens are issued and offered for sale according to the rules established by the legal wrapper.

For now, the bulk of tokenized offerings are funds that are limited to qualified investors and require a minimum investment of $1 million. As of March 2026, retail investors can buy some tokenized stocks, but in most cases, they do not own the actual company shares, only financial exposure to movements in the share price.

To buy and sell tokenized stocks or ETFs, a retail investor typically goes through a process that's a bit like opening a brokerage account, but with a few extra steps.

First, they sign up with a platform that offers tokenized securities, which so far means companies such as Securitize, tZERO, or Backed Finance. Once the account is approved and funded, buying a security is much like buying stocks or shares in an ETF, except that the digital token is placed into a digital wallet.

Some platforms manage this wallet for their customers, so it feels no different from using a conventional brokerage app. Others enable or require customers to hold tokens in their own personal wallets.

The key difference from traditional stock trading is that everything happens on a blockchain—a shared digital record book—which means trades can settle instantly rather than the usual one business day, and the market can operate around the clock rather than just during stock exchange hours.

Asset-backed tokens represent direct ownership of a security, like a digital version of a paper stock certificate. It's ultimately an actual share of an asset sitting in a digital wallet or a custodian account. Even if the company that created the token disappeared, the investor would still have a legal claim to the underlying asset.

Synthetic tokens don't actually confer ownership of an underlying asset. They're merely designed to mimic the price movement of the underlying asset, giving the investor the same financial upside or downside without any actual ownership. Because no real security is involved, synthetic tokens often operate outside traditional financial regulations, which can make them more accessible but also riskier, since there's no underlying asset backing up the investment if something goes wrong.

One selling point of tokenization is that it can provide ordinary investors with access to existing markets that were previously out of reach, including early stage private companies, private-equity and venture-capital funds, and even infrastructure assets. New forms of markets might also be created.

Tokenization may also offer operational benefits for financial markets. Blockchains promise a different way of recording and settling financial transactions, one in which all market participants have access to the digital, essentially immutable ledger, record in which those transactions are recorded, greatly enhancing speed and reducing cost. But tokenization is about more than convenience and streamlining market mechanics. For many big market players, especially, it's about maximizing potential returns for themselves and their clients.

Some common use cases, now limited to certain fund issuers and a handful of markets, illustrate how that would work.

• Most tokenized finance in the United States is currently limited to MMFs and private funds. Many investors want to find uses for their capital beyond earning basic yield, so some fund issuers enable these investors to exchange their shares for stablecoins, which can then be used in the crypto ecosystem via a secondary market. So the investor gains liquidity in a way that was previously unavailable.
• In other cases, investors can go a step further. Some providers of DeFi products accept these funds as a reserve asset or collateral for margin on cryptocurrencies. This enables investors to earn yield on the tokenized MMF and trade crypto with the same funds.
• In a way, investors can also use tokenized funds for margin collateral on repurchase agreements and traditional derivatives transactions. However, with few exceptions, tokenized MMFs are currently categorized as securities, meaning they can't be freely transferred the way stablecoins are. This will require permanent, categorical regulatory changes.

Some cryptocurrencies could benefit from tokenization. So far, most of the currencies rise or fall in value along with the broader crypto market, but tokenization could generate separate, activity-based demand for the currencies. Every blockchain has its own native crypto coin, and users must pay a small fee for every transaction on the blockchain, potentially increasing demand for the currency. Lending of the coin and liquidity staking might also rise with economic activity, creating additional demand. Of course, in many industries well-known brands have not always survived turbulent changes.

Regulators have urged extreme caution about making fundamental changes to the way U.S. financial markets work, warning that while blockchains offer enormous potential, tokenization comes with significant risks—some of them likely unknown or little-understood—that could outweigh the benefits of tokenization.

Some skeptics question the basic value of tokenization to the public, noting that most of the assets in question can already be traded online, instantly, in highly liquid markets, more or less night and day.

Regulators warn that tokenization, if it results in financial institutions becoming more interconnected and highly leveraged, could jeopardize financial stability. Sell-offs could happen more quickly and be harder to contain, particularly if tokenized assets are widely used as collateral in crypto and DeFi markets.

The technical aspects of tokenization also introduce unique risks, many say, including vulnerabilities in smart contracts. Blockchains also face cybersecurity risks, and a failure could be amplified if market infrastructure is dominated by only a few service providers.

While tokenization provides retail investors access to previously inaccessible markets, the SEC warned in January 2026 that holders of synthetic tokenized securities—representations of underlying assets versus tokens that are themselves securities—face additional third-party risks, including bankruptcy, that holders of actual securities do not.