Tokenized assets hit $26b as Wall Street goes on-chain

In the latter half of 2025, major financial institutions decisively stepped into tokenization, signaling a pivotal shift in traditional finance. NASDAQ’s SEC filing to list tokenized securities and ETFs, alongside BlackRock’s public emphasis on tokenization as a core secular theme alongside Bitcoin, underscored this momentum. BlackRock’s pioneering moves included tokenizing existing ETFs, such as Bitcoin and Ether ETFs presumably on Ethereum, and launching the $2.2 billion tokenized Treasury fund Biddle, which was made tradable on decentralized platforms like Uniswap with compliance managed by Securitize. Meanwhile, Figure’s IPO with $12 billion issued on-chain demonstrated tangible operational efficiencies, slashing loan processing times from 40 to 10 days and reducing costs to 30% of industry averages, highlighting tokenization’s practical benefits in private credit markets.

Early pilot initiatives extended beyond asset issuance to encompass foundational infrastructure and regulatory groundwork. Institutions like JPMorgan launched tokenized money market funds on Ethereum, seeding $100 million of capital and targeting qualified investors to leverage real-time settlement and enhanced collateral mobility. Concurrently, regulatory frameworks such as the U.S. GENIUS Act and the EU’s MiCA came into force in 2025, providing much-needed clarity that enabled these pilots to move from experimentation toward execution. Cross-bank blockchain frameworks developed by JPMorgan and DBS facilitated seamless tokenized deposit transfers across permissioned and public chains, integrating regulated bank money with core banking systems and offering practical on-chain cash solutions for corporates and treasuries.

The early institutional adoption phase also revealed a strategic embrace of tokenization’s unique advantages—24/7 trading, composability, interoperability, and precise risk definition—while grappling with persistent challenges like secondary liquidity and regulatory clarity. BlackRock’s roadmap anticipates a 24–36 month timeline culminating in a 2026 'show-me' phase to demonstrate real utility, reflecting a cautious yet confident approach. Simultaneously, firms like Coinbase and Kraken expanded into tokenized equities and prediction markets, signaling growing market infrastructure and regulatory engagement. This wave of pilot projects, including Figure’s DeFi marketplace Democratized Prime leveraging stablecoins for on-chain liquidity and lending, exemplifies how tokenization is evolving from isolated experiments into scalable financial primitives.

By the end of 2025, institutional tokenization had transitioned from nascent pilots to meaningful market infrastructure, with tokenized real-world assets surpassing $26.5 billion, driven largely by private credit and U.S. Treasury securities. Assets under management in tokenized funds nearly quadrupled to over $7 billion, supported by production-ready infrastructure from JPMorgan and Goldman Sachs. The convergence of traditional finance and blockchain was further evidenced by BlackRock’s $100 million cumulative dividends paid from its tokenized money market fund and NASDAQ joining blockchain validation networks. Despite the crypto market’s relatively small size, institutional sentiment was robust, viewing tokenization not as an option but a mandate, setting the stage for accelerated adoption once regulatory and liquidity challenges are fully addressed.

By late 2025, regulatory clarity in the US had accelerated markedly, with the SEC issuing pivotal no-action letters such as the one to DTCC authorizing a three-year pilot to tokenize real-world assets including US Treasuries and equities. This regulatory momentum was bolstered by landmark legislation like the GENIUS Act, which established a federal licensing regime for stablecoin issuers mandating 100% reserves and removing stablecoins from SEC jurisdiction, thereby reducing legal uncertainty and enabling institutional participation. Concurrently, regulatory bodies like the CFTC introduced pilot programs permitting digital assets such as Bitcoin, Ethereum, and USDC as margin collateral, further integrating crypto assets into traditional financial markets and signaling a coordinated effort to support compliant tokenized securities infrastructure.

Infrastructure development kept pace with regulatory advances as Ethereum solidified its role as the foundational blockchain for institutional tokenization, highlighted by the Fusaka upgrade in late 2025 which increased BLOB capacity eightfold to enhance Layer 1 and Layer 2 scalability. This was complemented by emerging Layer 2 networks like Arbitrum, Base, and Polygon offering low fees and fast finality, alongside permissioned chains such as Fnality and Partior catering to centralized governance needs. Major financial institutions, including BlackRock and JPMorgan, launched tokenized money market funds on Ethereum, leveraging these upgrades to enable 24/7 real-time settlement and programmable assets, while DTCC’s adoption of private AppChains built on Ethereum-compatible clients like Hyperledger Besu underscored a hybrid approach marrying privacy, compliance, and interoperability between TradFi and DeFi ecosystems.

Institutional adoption of tokenization gained visible traction as leading asset managers and exchanges embraced blockchain-based securities, with BlackRock adapting its money market funds to be GENIUS Act compliant to back stablecoins and JPMorgan launching a $100 million tokenized money market fund on Ethereum targeting qualified institutional investors. The SEC’s approval of Nasdaq’s tokenized securities trading and NYSE’s partnership with Securitize to build a new digital trading platform exemplify divergent yet complementary strategies to integrate tokenized assets into existing and new market infrastructures. These developments, coupled with ongoing regulatory initiatives like the forthcoming SEC innovation exemption and Clarity Act, are setting the stage for 24/7 trading, fractional ownership, and broader market transformation, signaling a paradigm shift from legacy systems to blockchain-native financial ecosystems.

Despite significant progress, challenges remain in standardization and regulatory consensus, as highlighted by the FIX Trading Community’s call for global standards to prevent fragmented data and workflows amid retail brokers like Robinhood and eToro entering tokenized stocks. Moreover, internal regulatory debates persist around the scope of tokenization rights, particularly whether third parties can tokenize stocks without issuer consent, and the potential impact of rescinding Rule 611 on investor protections. These tensions underscore the evolving nature of regulatory frameworks, with stakeholders like Citadel and SIFMA advocating for maintaining traditional separations in market roles, while innovation exemptions could disrupt existing market economics by enabling integrated 'one-box' trading models. This ongoing dialogue will be critical in shaping the sustainable growth and institutional maturity of tokenized securities markets.

Between Q1 and Q2 of 2026, the tokenized asset landscape witnessed a remarkable expansion across multiple classes including equities, real-world assets, commodities, and money market funds, driven by strategic partnerships among exchanges, asset managers, and fintech firms. Platforms like Securitize, managing $4.6 billion in tokenized assets with a projected market growth to $2 trillion, exemplify this surge, as they enable broader market adoption by simplifying trading, settlement, and custody, thereby enhancing liquidity and price discovery. This ecosystem growth is further supported by multi-chain integration efforts involving Ethereum, Solana, Polygon, and Avalanche, which facilitate cross-chain asset movement and interoperability, crucial for scaling tokenization beyond niche markets.

Tokenized equities have emerged as a particularly dynamic segment, with innovations ranging from Figure’s Onchain Public Equity Network (OPEN) offering true blockchain-native equity issuance and 24/7 atomic settlement, to major exchange collaborations such as Nasdaq’s partnership with Kraken to launch regulated tokenized stock trading by early 2027. This period also saw Coinbase and Robinhood expanding tokenized stock offerings globally, with Coinbase integrating over 200 tokenized equities and ETFs and Robinhood targeting European markets via Arbitrum. Despite fragmentation between synthetic derivatives and true ownership models, regulatory clarity—highlighted by the SEC’s January 2026 guidance—and institutional involvement are fostering market integration and investor confidence.

The tokenization of fixed income and money market funds gained substantial traction, with BlackRock’s USD Institutional Digital Liquidity Fund paying out $100 million in dividends and JP Morgan launching a $100 million tokenized money market fund on Ethereum targeting qualified institutional investors. Tokenized U.S. Treasuries reached approximately $10 billion in value by early 2026, serving as a Tier 2 institutional collateral market integrated into exchange collateral programs, with platforms like Ondo, Securitize, and Circle commanding nearly 60% market share. These developments underscore tokenized funds as foundational instruments facilitating on-chain collateral use, real-time settlement, and bridging traditional finance with decentralized markets.

Commodity tokenization, led overwhelmingly by gold with tokens like Tether’s XAUT and PAXG accounting for over 70% of the $7.13 billion market, demonstrated rapid growth and institutional acceptance, trading volumes in 2025 surpassing all major gold ETFs except GLD. While expansion into energy and agricultural commodities remains nascent, the ability of tokenized gold to maintain direct claims on physical bullion while enabling fractional ownership, 24/7 trading, and DeFi collateralization highlights tokenization’s transformative potential. However, challenges persist including fragmented global regulation, proof-of-reserve standards below traditional audits, and liquidity concentration risks, indicating areas for further maturation.

By mid-2026, the New York Stock Exchange (NYSE) and Nasdaq have spearheaded a transformative shift toward 24/7 tokenized securities trading platforms, integrating stablecoins and blockchain-based on-chain settlement to enable continuous, global market access. The NYSE’s platform, developed in partnership with Securitize and leveraging its Pillar matching engine, supports instant atomic settlement and fractionalized tokenized equities and ETFs, while Nasdaq collaborates with Xdocs to build a permissioned layer interoperable with existing broker-dealer infrastructure. These initiatives, pending regulatory approvals and supported by SEC no-action letters, aim to disrupt traditional market hours and expand investor participation worldwide, including emerging markets, by offering seamless trading beyond legacy exchange schedules.

The Depository Trust & Clearing Corporation (DTCC) has played a pivotal role in institutionalizing tokenization by launching a three-year SEC-approved pilot in late 2025 and executing the first live production trades of tokenized securities—including Microsoft, QQQ, SPY ETFs, and U.S. Treasuries—in July 2026. Utilizing a multi-chain settlement approach with private Hyperledger Besu and the public Canton Network, DTCC’s initiative preserves full legal ownership rights and integrates seamlessly with traditional post-trade workflows, signaling a foundational infrastructure shift toward 24/7 on-chain settlement. With participation from over 40 leading financial institutions such as BlackRock, JPMorgan, Goldman Sachs, and Vanguard, DTCC is positioned to roll out its tokenization service broadly by October 2026, marking a watershed moment in mainstream market modernization.

This evolution toward continuous trading is not merely a technological upgrade but a strategic response to investor demands and market inefficiencies. Platforms like NYSE’s tokenized securities ATS combine off-chain matching with on-chain settlement to offer low-friction access for broker-dealers, enabling features such as fractional ownership, collateralized borrowing, and daily dividend distributions. Meanwhile, Nasdaq’s integration of Talos digital asset tools into its Calypso risk and collateral system targets unlocking $35 billion in excess collateral, illustrating how tokenization enhances liquidity and capital efficiency. As Michael Blaugrund, VP at ICE, emphasizes, this transformation is the most significant since electronic trading, driven by the imperative to close the risk gap inherent in limited trading hours and to meet retail investors’ expectations for always-on markets.

Despite the enthusiasm, the transition to 24/7 tokenized markets is a measured, regulatory-sensitive process. The SEC’s collaborative stance, evidenced by no-action letters and ongoing dialogues with exchanges and regulators like FINRA, underscores the need to balance innovation with investor protection. Both NYSE and Nasdaq anticipate a hybrid market structure where traditional and on-chain capital markets coexist, allowing market participants to choose systems that best fit their needs. Moreover, the involvement of regulated intermediaries—such as transfer agents holding smart contract keys—ensures compliance and reversibility on public blockchains like Ethereum, addressing longstanding legal uncertainties and reinforcing trust as foundational rather than competitive advantage in this new era.

By mid to late 2026, institutional tokenization has matured into a multi-chain ecosystem characterized by strategic deployments across leading blockchains such as Solana, Ethereum, and Arbitrum. Asset managers like WisdomTree and Franklin Templeton are tailoring tokenized funds to diverse jurisdictions and blockchain environments, with Franklin Templeton’s 'Benji' fund exemplifying cross-border, multi-chain strategies that accommodate regulatory nuances and collateral use cases. Meanwhile, major financial players including Robinhood and BlackRock are expanding tokenized securities offerings on permissioned DeFi platforms like Uniswap and launching proprietary customizable blockchains to optimize governance, privacy, and compliance, signaling a convergence of traditional finance and decentralized infrastructure.

Global expansion of tokenization is accelerating through coordinated regulatory task forces and institutional custody solutions that underpin compliance and market integrity. The UK Treasury’s 2026 launch of a tokenization task force, involving heavyweights such as BlackRock, Goldman Sachs, and JPMorgan, focuses initially on tokenized repurchase agreements to enhance settlement speed and transparency, setting a precedent for mainstream adoption. Simultaneously, APAC emerges as a powerhouse with $10 trillion in assets managed across Singapore and Hong Kong, supported by progressive regulations in Japan, South Korea, and Hong Kong, while African fintech Daya pioneers tokenized US stock trading with near-zero fees and 24/7 liquidity, illustrating tokenization’s widening geographic footprint.

Institutional players and infrastructure providers are driving interoperability and multi-chain integration to overcome fragmentation in blockchain ecosystems. The launch of Zero, a Layer 1 blockchain backed by Citadel Securities, DTCC, NYSE, and Google Cloud, epitomizes the institutional commitment to on-chain settlement and seamless cross-chain functionality. Concurrently, partnerships between major exchanges—Nasdaq with Kraken and NYSE with OKX—are pioneering multi-chain tokenized equities trading platforms targeting launches in late 2026 and early 2027, aligning with the SEC’s regulatory clarity on tokenized securities and emphasizing KYC-compliant, 24/7 trading environments that blend traditional and decentralized finance paradigms.

The maturation of institutional custody and compliance frameworks is emerging as a critical moat that reduces onboarding costs and regulatory risks, enabling scalable tokenization across jurisdictions. Firms like Securitize are facilitating compliant trading of tokenized funds on decentralized exchanges, while consortiums of US regional banks are building shared tokenized deposit networks such as 'Cari' to streamline institutional workflows. Industry leaders like GSR are proactively securing global licenses across the UK, Cayman, Singapore, and the US to support multi-jurisdictional tokenized asset trading, anticipating that forthcoming SEC innovation exemptions will unlock new utilities for tokenized securities, including collateralization and DeFi integration.

The future of institutional tokenization is poised for transformative growth, with industry leaders like BlackRock, JPMorgan, and Nasdaq actively scaling tokenized funds and equities to enable 24/7 global trading and fractional ownership. This evolution promises to democratize access to traditionally illiquid markets, especially benefiting emerging economies, while blending traditional incumbents with new digital paradigms—as Steve McLaughlin observes, about 80% of asset classes could be tokenized within two decades, signaling a meshing of old and new financial worlds. However, this shift demands overcoming significant challenges including liquidity fragmentation, custody complexities, and regulatory uncertainty, notably around the stalled Clarity Act and stablecoin yield restrictions, which continue to divide crypto innovators and banks.

Market dynamics are further complicated by the competition between synthetic and issuer-based tokenization models, with protocols like Morpho and Uniswap capitalizing on stablecoin swaps and decentralized exchange ecosystems, while issuer-led approaches, exemplified by Superstate’s $82 million Series B led by Bain Capital, strive to bring official securities on-chain. This dichotomy reflects a deeper structural question about whether tokenization will merely recreate exposure synthetically or fundamentally migrate assets onto new blockchain rails, a debate that will shape liquidity, governance, and investor access in the years ahead.

Technological innovation, particularly the integration of zero-knowledge proofs, is emerging as a critical enabler for privacy and trust in tokenized finance, allowing fund managers to protect proprietary strategies and pioneering undercollateralized lending through on-chain verification of offchain credit scores, as seen with protocols like 3J. Despite early setbacks such as the October 2025 flash crash, these advancements demonstrate functional viability and hint at a future where programmable smart contracts automate complex transactions, reduce intermediaries, and usher in a more transparent, data-driven financial system.

Institutional adoption is accelerating with major market infrastructure players like ICE and the NYSE launching tokenized securities platforms slated for 2026 and beyond, aiming to modernize capital markets through continuous trading, near-instant settlement, and expanded digital capabilities including borrow-lend and digital IPOs. Yet, liquidity remains constrained within tightly permissioned pilots, and regulatory clarity is lagging, prompting industry veterans like Michael Blaugrund to warn that waiting for perfect regulatory conditions is untenable. Meanwhile, the tokenization revolution threatens traditional brokerage revenue streams, underscoring the urgency for incumbents to adapt or risk obsolescence.