What are institutional leaders saying about Tokenization and
Digital Securities?
Institutional leaders are signaling what many describe as a potential long-term shift toward the
adoption of tokenization and digital assets, with a significant number of firms moving from pilot
experiments to integrating these technologies into core financial infrastructure. Key insights from 2025
and early 2026
According to the 2025 Institutional Investor Digital Assets Survey, conducted by Coinbase in
collaboration with EY-Parthenon, released in March 2025, approximately 83% of institutional investors
indicated they expect to increase their allocations to digital assets.
Here are the details of that finding:
- Key Drivers: The report cited increased regulatory clarity, the maturation of crypto infrastructure,
and attractive risk-adjusted returns as the main drivers for this rise in sentiment. - From “If” to “When” (The Inevitability): Tokenization is increasingly described by some industry
participants as a long-term development in financial markets. Industry leaders are focusing on
“how” to implement, not “if” they should, with survey respondents indicating that 52% of
financial institutions expect they may be actively managing live tokenized collateral by the end
of 2026. - The “Trillion Dollar” Opportunity: BlackRock CEO Larry Fink has become a leading advocate,
suggesting that “every asset” could be tokenized. Experts have estimated that tokenized assets
could top $400 billion by the end of 2026 and in some scenarios may grow into a $16 trillion to
$30 trillion market by 2030–2034, though actual outcomes may differ. - Private Markets as the “First Frontier”: Institutional focus is heavily on tokenizing traditionally
illiquid assets, particularly private equity, private fixed income, and real estate, to potentially
improve liquidity, speed up settlements, and reduce, in some cases, compliance costs.
Key Drivers for Adoption:
- Operational Efficiency: Leaders cite 24/7, near-instant settlement and lower operational
costs as primary benefits. - Regulatory Clarity: 2025 was viewed as a “pivotal year” for transitioning from “regulation
by enforcement” to clearer frameworks, such as the EU’s MiCA and US legislative
advancements. - Stability and Security: Institutions favor regulated, permissioned blockchains that blend
traditional financial standards with the efficiency of DLT (Distributed Ledger Technology). - Convergence of TradFi and DeFi: Traditional financial institutions (TradFi) are increasingly
interacting with decentralized finance (DeFi) tools. Examples include JPMorgan’s JPM Coin and
Citi Token Services, which utilize blockchain for real-time, cross-border payments and liquidity
management. - The Next Phase: 2026 and Beyond: The focus is shifting toward “programmable compliance” and
“interoperability” between different blockchain platforms, ensuring they can work together
rather than fragmenting into isolated silos.
Key Perspectives from Institutional Leaders:
(The views expressed are those of the individual quoted and do not constitute an endorsement.)
“Blockchain technology is likely to be the foundational innovation transforming financial
infrastructure, with tokenization reshaping how assets are issued, transferred, and
recorded.”
— Jenny Johnson, CEO, Franklin Templeton
Franklin Templeton CEO Jenny Johnson, leading an approximately $1.5 trillion asset manager, has stated
that tokenization and blockchain technology may fundamentally reshape financial infrastructure by
enabling 24/7 markets, reducing operational costs, and improving transaction speed and transparency.
She has emphasized that blockchain technology, rather than cryptocurrencies themselves, represents
the primary long-term innovation, often describing the opportunity as focusing on the underlying “rails”
of financial systems.
Johnson has characterized tokenization as a shift in the “behind-the-scenes plumbing” of finance,
moving from traditional account-based systems toward blockchain-enabled digital wallets. She has also
suggested that cryptocurrencies such as Bitcoin may, at times, distract from the broader innovation
occurring at the infrastructure level.
Under her leadership, Franklin Templeton has taken early steps in this area, including launching the
Franklin OnChain U.S. Government Money Fund (FOBXX), participating as a node validator across
multiple blockchains, and exploring tokenized asset strategies. While noting that regulatory uncertainty
remains a key constraint, she has indicated that tokenization of assets such as real estate and private
credit could expand access to investment opportunities over time. Johnson has also expressed the view
that digital assets may represent a long-term evolution in financial markets, with infrastructure providers
potentially playing a central role in enabling transparency and efficiency.
According to Joerg Ambrosius, President of Investment Services at State Street, institutional
investors are shifting from experimentation toward more strategic engagement with digital
assets, with tokenization playing a central role.
State Street’s 2025 Digital Assets Outlook reports what it describes as a shift among institutional
investors from experimentation to strategic adoption of digital assets, with tokenization emerging as
the primary focus. Based on a global survey of 324 senior executives across asset managers and asset
owners, the research finds that nearly 60% of institutions indicate they plan to increase digital asset
allocations in the next year, and average exposure is expected to double within three years, according to
survey responses. By 2030, more than half anticipate 10–24% of institutional investments will be
tokenized, signaling potential mainstream integration.
The report highlights private markets, notably private equity and private fixed income, as the first asset
classes likely to be tokenized, driven by the potential to unlock liquidity and operational efficiency in
traditionally illiquid markets. Institutions cite greater transparency, faster settlement, and lower
compliance costs as the leading benefits, with nearly half expecting cost savings greater than 40% due
to improved transparency alone. Realized savings may vary.
Organizational change is reinforcing this momentum. 40% of respondents already have dedicated
digital asset teams, and close to a third say blockchain-based operations are now central to broader
digital transformation strategies. While many investors believe generative AI and quantum computing
may ultimately have even greater impact on investment operations, the study emphasizes that these
technologies are viewed as complementary accelerators of digital asset and tokenization initiatives
rather than substitutes.
“The digital asset trend has shifted from a focus solely on cryptocurrencies, like Bitcoin
and Ethereum, to exploring the tokenization of all assets.”
— Amy Oldenburg, Head of Digital Asset Strategy, Morgan Stanley
Morgan Stanley argues that digital assets have moved increasingly from the financial fringe into the
mainstream, reshaping how money moves, portfolios are constructed, and financial infrastructure
operates globally. As of 2025–2026, the combined market value of cryptocurrencies, stablecoins, and
tokenized assets was reported to have briefly exceeded $4 trillion, reflecting accelerating adoption by
institutional investors, corporations, and regulated financial platforms.
A major catalyst for this shift has been institutional integration following regulatory progress,
particularly the approval of U.S. spot Bitcoin and Ethereum ETFs in 2024. Since then, banks, wealth
platforms, pensions, endowments, and foundations have begun allocating, often modestly, to crypto,
reversing the typical pattern in which institutions lead adoption ahead of retail investors. Crypto ETFs
alone surpassed $200 billion in assets, attracting more than $40 billion in inflows in 2025 despite
ongoing volatility.
Morgan Stanley also highlights persistent risks and structural volatility. Crypto remains far more volatile
than traditional asset classes, about four times the volatility of the S&P 500, meaning that even small
allocations can materially increase portfolio risk. At the same time, clearer regulation, growing
derivatives markets, and expanding exchange and broker infrastructure suggest that digital assets are
becoming a permanent component of the global financial ecosystem, requiring disciplined strategies
from both investors and companies.
Institutional commentary in 2025 and early 2026 suggests that tokenization and digital assets have
continued to evolve. Large asset managers, banks, and asset owners are increasingly evaluating how
and at what scale blockchain-based finance may be integrated into existing systems. Regulatory clarity,
improving technology, and real-world cost savings have shifted digital assets from innovation labs into
operating models.
What distinguishes this phase from prior cycles is the institutional emphasis on utility over speculation.
Private markets, tokenized collateral, stablecoins, and programmable settlement are emerging as
practical solutions to long-standing inefficiencies in liquidity, transparency, and risk management. At the
same time, firms are investing in governance, compliance, and interoperability to ensure digital assets
meet institutional standards rather than exist outside them.
While risks remain, particularly around volatility, standardization, and execution, the direction of travel
remains. As tokenization converges with AI, automation, and global regulatory frameworks, digital
assets are becoming a structural feature of capital markets. For institutions, the competitive question
may no longer be if to engage, but how strategically and how soon they position themselves for a
tokenized financial system.
This material is for informational purposes only and does not constitute investment advice or a
recommendation. Digital assets involve significant risks, including volatility, regulatory uncertainty,
technological risks, and potential loss of principal. Past trends and third-party projections are not indicative of
future results. Rialto Markets LLC is a registered broker-dealer and member of FINRA and SIPC. All
investments involve risk, including possible loss of principal.
Sources:
Coinbase Institutional Investor Survey
Morgan Stanley Digital Assets Push into Mainstream
Fidelity Digital Assets Research
State Street 2025 Digital Assets Outlook
Franklin Templeton | Pensions and Investments