Tokenization Is Coming – And It’s Going to Reshape the Investment Landscape

By Rick Lake, CAIA^®, CETF^® | Founder, Narrative Alpha
June 2, 2025

What if every asset in your client’s portfolio—from stocks and bonds to real estate and private equity—could be issued, traded, and settled almost instantly on a secure digital ledger?”

It’s not science fiction. It’s tokenization. And it’s moving faster than many advisors realize.

What Is Tokenization, Really?

At its core, tokenization turns ownership of real-world assets—securities and funds, buildings and art, loans and infrastructure—into digital tokens that live on a blockchain or distributed ledger.

It’s not about crypto hype. It’s about modernizing how traditional assets are created, tracked, and transacted. Tokenization enables:

• Instant or near-instant settlement
• Fractional ownership
• 24/7 trading windows
• Built-in compliance and automation
• Lower costs

If digitizing paper stock certificates ushered in the electronic age of investing, tokenization may represent the next structural leap. It doesn’t just digitize access—it reshapes the plumbing underneath.

Why Advisors Should Pay Attention

Tokenization isn’t theoretical. It’s happening now. And some of your clients may be holding tokenized assets—without even knowing it.

The case for tokenization? Lower friction. Greater transparency. And access to investments that were once limited by structure, cost, or liquidity.

The market for tokenized investments has grown from $1 billion in 2021 to over $23 billion today:

In time, tokenized assets may form the core of how portfolios are built, rebalanced, and reported.

Who’s Leading the Charge?

Some of the world’s largest asset managers are moving fast:

Franklin Templeton: The Franklin On-Chain U.S. Government Money Market Fund (FOBXX), launched in 2024, was the first U.S. registered mutual fund to record ownership directly on a blockchain. FT’s Benji app allows investors to browse and trade tokenized assets and cryptocurrencies.

BlackRock: BlackRock’s BUIDL Fund—a tokenized institutional money market fund on Ethereum and other blockchain networks—has already passed $2.5 billion AUM little more than a year after its launch.

Wisdom Tree: The Wisdom Tree Digital Funds comprise an entire mutual fund family, with over a dozen funds—encompassing income, growth, and asset allocation—with secondary recordkeeping on the blockchain. Notably, this fund family uses only traditional assets (and no cryptocurrencies).

Hamilton Lane, KKR, and Apollo have tokenized private equity and private credit funds.

JPMorgan, Citi, UBS, and ABN AMRO have been experimenting with tokenized bonds, cross-border repos, and payment systems.

This isn’t fringe innovation. It’s Wall Street, retooled.

What are the current categories of tokenized assets?

Stablecoins: Tokenized cash equivalents (like USDC) are already a fixture of digital markets. Growth in this sector paused during the crypto winter of 2022 but resumed in 2024. Regulation is pending to accommodate future growth.

Real Estate: Commercial and residential properties are being fractionalized into tokenized shares.

Bergen County, New Jersey’s largest, just announced a project to digitize $240 billion of real estate and move 370,000 property records on-chain. Project leaders, who called it the largest project of its type in U.S. history, highlight the hoped-for long-term benefits: lower costs, fewer errors, reduced fraud, and a decline in title disputes.

Private Equity and Credit: Private equity and credit funds are offering tokenized versions with lower minimums and greater portability. Direct tokenization of loans can lead to greater efficiencies and lower costs by removing legacy intermediaries.

Mutual Funds & ETFs: Traditional wrappers are moving on-chain—with real-time reporting and streamlined access. Mutual funds are the leader in registered funds. ETFs are just around the corner.

Money Market Funds: Tokenized versions are growing fast, offering high-grade liquidity with blockchain efficiency.

Bonds: Governments and corporates alike are testing tokenized debt issuance for speed and traceability.

The Caveats

Like any structural shift, tokenization brings its own set of issues:

• Regulatory frameworks are still evolving.
• Custody and wallet infrastructure needs more maturity.
• Industry-wide protocols and processes need to be developed.
• Secondary markets are thin—so far.
• Cybersecurity remains a top concern.

But ETFs also had issues in their early years. Look where they are now.

What Advisors Can Do Today

Start small. Ask questions. Learn the terms. And most importantly, talk to your product partners:

• Are they exploring tokenized strategies?
• Can they explain how tokenization might affect portfolio design or fund access?
• What education do they offer for advisors and clients?

This isn’t about becoming a tech evangelist. It’s about staying sharp—and preparing your clients for the next evolution in access and efficiency.

Final Word

Tokenization lives at the intersection of innovation and infrastructure. It’s not about chasing trends—it’s about staying ahead of changes that are already reshaping the industry.

If you remember how ETFs reshaped access and lowered costs, you’ve seen this story unfold. Now tokenization is writing the next chapter.

It starts with the innovators. Then comes the infrastructure. Then come the advisors ready to make it work for real clients.

Get ready for a new world of investing.

Rick Lake writes and speaks about alternative investing and digital assets. Learn more at his website: www.ricklake.com

Disclaimer:
This content is for informational and educational purposes only and is not investment advice or a recommendation to buy, sell, or hold any security or strategy. The views expressed are the author’s and do not necessarily reflect those of any firm or contributors. Information is believed to be reliable at the time of writing but is not guaranteed to be accurate or complete.

Past performance is not indicative of future results. All investments involve risk and may not be suitable for all investors. Digital asset strategies may entail a significant risk of loss, including the potential for total loss, and may not be appropriate for every portfolio.

Financial professionals must perform their own due diligence and consider each client’s goals, risk tolerance, and financial circumstances. This content does not constitute legal, tax, or accounting advice.

The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the position of DACFP or its affiliates. This content is provided for educational and informational purposes only and does not constitute investment, financial, legal, tax, or accounting advice, nor an offer, solicitation, or recommendation to buy or sell any security or other asset. Information is current as of the date of publication and may become outdated; no representation is made as to its accuracy or completeness. Publication does not constitute an endorsement of the author, the author’s firm, or any product or service referenced, and the author may hold positions in the assets discussed. Readers should consult their own qualified professionals before making any financial decisions.