$8.3B Real World Assets Now On-Chain: Can Tokenization Make Banks Top Crypto Custodians?

Why It Matters

The move could position banks as dominant crypto custodians by leveraging regulatory trust, existing client relationships and scale, while squeezing native crypto custodians and reshaping liquidity and settlement dynamics in digital-asset markets.

Summary

Wall Street banks are quietly rebuilding crypto infrastructure through tokenization and custody, with $8.3 billion of real-world assets now represented on-chain. Major institutions are layering fund administration, cash management and settlement onto blockchain rails—examples include BNY Mellon’s LiquidityDirect—shifting the focus from purely defensive custody to integrated asset servicing. The move could position banks as dominant crypto custodians by leveraging regulatory trust, existing client relationships and scale, while squeezing native crypto custodians and reshaping liquidity and settlement dynamics in digital-asset markets.