Don’t Just Tokenize Assets, Build the Institutions to Back Them

Why It Matters

If these institutional frameworks hold, tokenization could unlock new liquidity, reduce settlement frictions and broaden investor access, but its success hinges on robust governance, custodial arrangements and regulatory enforcement.

Summary

Tokenization of real-world assets is advancing beyond pilot projects as regulatory clarity and growing institutional adoption are building the legal, custody and compliance infrastructure needed to scale. While critics warn of hype and unresolved legal questions, proponents point to pilot programs, partnerships between asset managers and blockchain firms, and clearer rules as signs the market is maturing. If these institutional frameworks hold, tokenization could unlock new liquidity, reduce settlement frictions and broaden investor access, but its success hinges on robust governance, custodial arrangements and regulatory enforcement.