Executive Summary
- Tokenization uses blockchain infrastructure to represent and manage ownership of traditional financial and digital-native assets onchain.
- For asset managers, tokenization may improve operational efficiency while supporting new approaches to product design and distribution.
- Industry momentum is growing, with PwC projecting tokenized fund assets to grow at a 41% compound annual growth rate to USD 715 billion globally by 2030.1
- Smart contracts tied to tokenized funds enable automation of functions such as compliance, transfers, distributions and redemptions.
- Tokenized funds and assets generally remain subject to traditional legal, regulatory and compliance requirements.
Bringing Clarity to Tokenization
Tokenization is emerging as an important area of exploration for asset managers as blockchain-based infrastructure begins supporting the issuance, ownership and servicing of traditional financial and digital-native assets. This Q&A explores what tokenization is, why it matters and key considerations for fund providers evaluating this space.
What Is Tokenization, and Why Should Asset Managers Care?
Tokenization creates a digital representation (token) of an asset, ownership interest or financial claim on a blockchain-based ledger. The underlying constituent may be familiar, such as a stock, bond, commodity or fund share. What differs from traditional finance (TradFi) is the infrastructure used to record ownership and support transfers and servicing.
For asset managers, tokenization introduces a new operating layer—or onchain rail—for investment products. By using a shared ledger rather than multiple intermediary records, firms
may gain greater visibility into ownership and transaction activity, helping to support fund servicing. Other potential benefits include the automation of certain functions, 24/7 transferability and integration with decentralized financial (DeFi) platforms, which may reduce operational time and costs. Expanded access to market participants who prefer or operate within blockchain-based markets, along with the ability to customize tokenized products, may help asset managers reach new pools of capital.
Why Is Tokenization Gaining Traction?
The tokenization ecosystem remains in its early stages, but it is no longer purely theoretical. Asset managers, infrastructure providers and other market participants are developing products, building capabilities and testing how traditional investment strategies can operate onchain. In fact, PricewaterhouseCoopers (PwC) expects tokenized fund assets to grow at a 41% compound annual growth rate to USD 715 billion globally by 2030, based on its 2025 survey of managers, distributors and investors. Of the managers surveyed, PwC discovered that 40% say tokenization will be their most important future product innovation.
Part of the interest stems from demand for TradFi assets within DeFi ecosystems. Tokenized products may provide asset managers with another channel to reach investors, subject to applicable regulations and investor-eligibility requirements. At the same time, features such as fractional ownership and flexible transferability may provide market participants with access to strategies not otherwise available through traditional fund structures.
For many firms, the near-term opportunity is practical. Tokenization initiatives help asset managers gain experience with product design, custody, compliance, servicing and third-party relationships while DeFi market standards and regulatory frameworks continue to evolve.
What Can Be Tokenized?
A wide range of assets, funds and indices can be represented in tokenized form. They include equities, bonds, fund shares, private-market assets, commodities and certain physical assets, as well as the indices that define and track these markets.
Equities are a natural starting point, because their role in capital markets is widely understood. Fixed income has also gained traction onchain, particularly through tokenized Treasury and short-duration products that can provide digital-asset market participants with access to yield while supporting collateral and financing workflows.
