What Is Tokenization and How to Get Exposure

Why It Matters

Tokenization slashes settlement time, boosts liquidity and cuts fund operating costs, reshaping how advisors deliver diversified, on‑chain exposure to traditional assets.

Key Takeaways

• Tokenization market hit $33.9B in 2025, 70% YoY growth
• BlackRock, Franklin Templeton, Janus Henderson, Fidelity tokenized US Treasuries
• Tokenization can cut fund operating costs by 23%, accounting by 30%
• Ethereum dominates institutional tokenization infrastructure and related fee revenue
• Advisors can access exposure via ETFs, tokenization equities, or direct tokens

Pulse Analysis

The rapid rise of real‑world asset tokenization reflects a broader shift toward digitizing traditional finance. By encoding securities on blockchains, firms achieve near‑instant settlement, 24/7 trading and the ability to issue fractional shares, unlocking liquidity for assets that were previously illiquid. Industry estimates vary widely—McKinsey sees a $4 trillion opportunity, while Standard Chartered projects up to $30 trillion—yet the $33.9 billion market size in 2025 signals strong early adoption, especially among heavyweight managers like BlackRock and Fidelity who have already launched tokenized Treasury products.

Beyond speed, tokenization promises measurable cost efficiencies. A 2025 Calastone study found that digitizing fund structures could reduce overall operating expenses by 23%, with accounting costs falling 30% and transfer‑agency fees dropping 25%. These savings stem from automated smart‑contract workflows that replace manual reconciliation and custodial processes. However, the transition is not without friction: regulatory clarity remains uneven across jurisdictions, and smart‑contract vulnerabilities still pose security risks. Liquidity, while improved for high‑volume tokens, can be thin for niche assets, requiring investors to scrutinize secondary‑market depth before committing capital.

For advisors, the tokenization landscape offers three practical entry points. First, exposure to the underlying blockchain infrastructure can be achieved through regulated alt‑coin ETFs that track platforms like Ethereum and Solana, capturing fee‑based revenue from increased on‑chain activity. Second, equities of firms building tokenization services—such as Coinbase, CME Group, ICE and Broadridge—provide indirect participation without direct crypto holdings. Finally, qualified investors may allocate to tokenized funds like BlackRock’s BUIDL or Ondo’s USDY, though these require high minimums and rigorous due‑diligence. As institutions continue to adopt blockchain rails, tokenization is poised to become a mainstream component of portfolio construction, offering advisors a new lever for efficiency and diversification.