Key takeaways

• Tokenization may be the next evolution of the financial wrapper, following mutual funds and ETFs. But unlike its predecessors, it does more than package exposure: it embeds ownership, transfer, settlement, and operational logic into the same digital layer.
• Collateral mobility is the most compelling near-term use case, with institutions including Citi actively building for 24/7 tokenized securities movement.
• Legal and regulatory clarity, particularly on ownership, the authoritative record, and digital identity, remains the primary barrier to scale across every jurisdiction.
• Interoperability between networks will determine whether tokenization creates a unified market or fragments into isolated pockets of liquidity.
  
  

Panelists

• Kim Hochfeld – Global Head of Digital Assets | State Stree
• Robert Crossley – Global Head of Industry Advisory, Digital Assets | Franklin Templeton
• Amor Sexton – Chief Operating Officer | Blockdaemon
• Nadine Teychenne – Global Head of Digital Assets, Investor and Issuer Services | Citi
• Moderator: Jeff Rundlet – VP, Institutional Solutions | Cryptio

Tokenizing assets vs. unlocking benefits

The market opportunity in tokenization is well-documented. McKinsey puts it at $2 trillion by 2030. BCG at $16 trillion. Standard Chartered at $30 trillion. And with DTCC processing $3.7 quadrillion in transactions in 2024, and actively moving into the space, the volume of activity that could be put on chain is almost incomprehensible.

But the panel opened with a challenge to how the industry frames the conversation. “As an industry, we talk a lot about tokenizing real world assets,” said Robert Crossley of Franklin Templeton. “We don’t talk a lot about unlocking real world benefits.”

Franklin Templeton has been running a natively on-chain money market fund since 2022: 24/7/365, across ten public chains and one private chain, with settlement measured in seconds. The experience has clarified something important: the technology is not the point. The second and third-order effects are.

“It’s really about the movement from accounts to wallets. Making assets machine readable by AI, the fact that everything is concentrated in your wallet, assets are programmable, and the fact that wealth is being created outside the traditional capital structure. When you put all of those four things together, they start to unlock a huge amount of difference in benefit.”
Robert Crossley, Franklin Templeton 

That shift also raises a foundational question for institutions: where does the authoritative record sit? As Nadine Teychenne of Citi put it later in the panel: “What is the tokenized asset, and what is your ownership of that asset legally? What is the single source of truth, or the golden record? Is that the off-chain transfer agency books, or is that the on-chain record?”

For tokenization to move from product innovation to institutional infrastructure, that question matters as much as settlement speed. Legal ownership, transfer of title, source-of-truth, reconciliation, and the relationship between on-chain and off-chain records are not secondary implementation details; they are the conditions for scale.

Right now, the industry is still largely issuing tokenized receipts of trades, a stepping stone to a fully tokenized world. The participants building toward that world, Crossley argued, need to keep the destination clearly in view.

The wrapper evolution

The most useful mental model on the panel came from Kim Hochfeld of State Street. "State Street Investment Management really invented the ETF wrapper just over 30 years ago," she said. What followed changed everything: the ability to trade a fund on an exchange, get an intraday price, settle at T+1. The ETF wrapper didn't change what was inside; it transformed how investors could access and use it.

Tokenization, Hochfeld argued, is the next evolution of that wrapper. "What tokenization gives you is a 24/7 nature, new collateral mobility, instantaneous settlement. And most importantly, for us as a large solutions provider, it is going to deliver our investment solutions to a venue, a digital wallet, where our investors are moving."

The framing matters because it shifts the question from "why would you tokenize?" to "where are your investors going, and how do you meet them there?" The great wealth transfer already underway will accelerate over the next two decades, and for asset managers, the strategic imperative is being present in the wallet infrastructure that will receive it.

Crossley extended the analogy: "An ETF is a wrapper. A token, in one sense, is a wrapper. But it's a smart wrapper. It's a programmable wrapper. It's almost also the asset, and it's also the infrastructure."

Not a technology problem

What does it actually take to make tokenization work operationally? Amor Sexton of Blockdaemon offered the clearest framing of the implementation challenge: "It's not so much where people go wrong, because it's not about the technology. It's where do people underestimate."

Her containerization-in-shipping analogy was one of the panel's sharpest. Standardized containers didn't just change how goods moved. They changed the design of ships, the layout of ports, and the operation of every piece of infrastructure in the chain.

"Tokenization is the first part. And in order to really see the benefits and the operation at scale, it needs more regulated institutions to come in, but it also needs all of the upstream and downstream processes, workflows and technology to be able to adapt."
Amor Sexton, Blockdaemon

The practical implication: launching a tokenized product is not a product launch. It is a holistic operational transformation, one that requires identifying every exception, every unhappy path, and every place where on-chain processes introduce considerations that off-chain workflows never had to handle. As Crossley noted from Franklin Templeton's own experience going through two SEC audits: "What the technology can do, and deploying that technology with enterprise risk controls in large, complicated, regulated organizations, is almost completely different."

Sexton's caveat to her own argument was equally important. The wrong move is to simply replicate existing processes with new technology. "It's about understanding where the technology itself can operate as a risk management tool, and deploying it in a way that really leverages that unique benefit." Multi-party computation for key management is one example: not a fancier tool for an old way of working, but a genuinely new capability that changes the control model itself.

The collateral opportunity

Of all the near-term use cases discussed, collateral drew the strongest consensus. Nadine Teychenne of Citi pointed to a concrete pain point: after CSD cut-off hours, assets become trapped, creating balance sheet costs for collateral owners and limiting their use in tri-party arrangements. “Tokenization is a very good enabler to solve that pain point,” she said.

But Teychenne’s point was broader than collateral alone. From a custody and payments perspective, the market still needs more regulated institutions with the wallet infrastructure and capability to give investors access to crypto and tokenized money market funds. Citi, she said, has been working on that capability for some time and expects to launch it in the US this year.

That infrastructure still needs to be matched by legal and regulatory recognition.

“What is the tokenized asset, and what is your ownership of that asset legally? What is the single source of truth, or the golden record? Is that the off-chain transfer agency books, or is that the on-chain record?”
Nadine Teychenne, Citi

On collateral specifically, Citi is already doing work around tokenized money market funds. But Teychenne noted that broader acceptance of new forms of collateral will likely come in stages: stablecoins first, followed by tokenized money market funds. “If we can unlock the use of tokenized money market funds for collateral, posting that as collateral, I think we’ll see a bit more of that in the future,” she said.

The cash leg matters too. As Teychenne put it directly, “you don’t really realize the efficiencies of tokenization or settlement on a blockchain without the cash leg.”

Crossley quantified the broader opportunity: BCG estimates approximately $100 billion of collateral is currently trapped in the system. But he argued the unlock is even larger than that figure suggests. "When investors are offered the choice, do you want the better, faster, cheaper, more secure system, or do you want to use the old rails? People will vote with their feet."  Stable coins, he noted, already demonstrate this: $270 billion of fiat converted on-chain by people who wanted control, portability, and 24/7 movement. "That's a pretty big unlock and use case."

Market structure and the record of truth

A recurring tension through the panel was the question of the authoritative record: when on-chain and off-chain books disagree, who is right? Sexton framed it as a governance and operational problem before it is a technology problem: "defining your governance and your operational workflows, making sure you can identify where the authoritative record sits. How do you deal with exceptions? How do you deal with corrections that need to be made in a real time settlement environment?"

Crossley pushed the framing further. "Who owns the record is almost a sort of web two way of thinking about it." A natively on-chain asset, with whitelisted wallets and programmable controls, makes the question of ownership and record-keeping almost self-answering: the token is the asset, the ledger is the book of record, and compliance can be built directly into the instrument itself. The industry hasn't arrived there yet, but that is the direction of travel.

For the transition period, Teychenne described what Citi has built: a custody model where clients can hold a tokenized money market fund or tokenized bond alongside traditional assets in the same safekeeping account. The client-facing experience is seamless. The infrastructure change behind it, building connectivity into public and permissioned blockchains and developing key management technology, has taken years.

The network question

On whether public or permissioned networks would dominate, the panel declined to pick a winner. "I think it still remains to be seen where the liquidity will coalesce," Teychenne said, noting that privacy concerns make public networks challenging for financial institutions, while permissioned networks offer fewer guarantees of distribution and decentralisation.

The practical conclusion from across the panel was interoperability. "Otherwise we'll still end up with islands of liquidity, trapped liquidity in those various networks," Teychenne said. Crossley made the point most directly: the question of public versus private is almost secondary to implementation quality. "If you do it in the wrong way, they're less secure. It's all in the implementation, not whether public is good or private is bad."

What the industry does need to coalesce around, Teychenne argued, are common token standards and a workable approach to digital identity, so that compliance can be built into the token itself, eliminating the current reliance on off-chain whitelists and blacklists.

The inflection point

Asked what it would take to reach scale, the panel converged on five things: infrastructure, regulation, education, products, and processes, with the caveat that none of them alone is sufficient, and that education means something different than it is usually taken to mean.

"It's getting that clarity and transfer of title on chain, which is the definitive source of truth," said Hochfeld, framing legal and regulatory clarity as the foundational unlock. One jurisdiction, the Clarity Act in the US, is a start. The rest of the world still needs to follow.

Sexton's framing brought the containerization analogy full circle: "the true inflection point is when the benefits of tokenization have really driven digitisation end to end across all of the ecosystems." Not when the largest institutions are ready, but when every participant in the chain, including those still running core systems in Excel, has adapted to the new standard.

And Crossley's time machine test may be the most clarifying benchmark of all.

"If someone put you in a time machine, you go back to the early nineties, and they said, 'there's a way to actually invest in the internet itself: the infrastructure, not just the company, not just Google and Facebook and Amazon, but you can actually get paid every time somebody goes to a website.' You'd say: 'yeah, sign me up, I'll mortgage the house.' That's where we are today with blockchain."
Robert Crossley

The real inflection point, he concluded, will arrive when the industry stops building toward it and starts talking about something else entirely. "When we're spending time at conferences talking about the benefits and not the technology, then we'll be there."

The takeaway

Tokenization is past proof of concept. The infrastructure exists, the first products are live, and the largest institutions in global finance are actively building. What separates the current moment from scale is not a technology breakthrough; it is the patient, unglamorous work of aligning legal frameworks, operational processes, and investor education across every jurisdiction simultaneously.

The panel's clearest message was this: the technology has already outpaced the thinking around it. Every institution at the table (State Street, Franklin Templeton, Citi, Blockdaemon) is not just building new products but rebuilding the mental models, governance frameworks, and operating models needed to use those products responsibly.

The outcome, when it arrives, will not feel like a technology launch. It will feel like a financial system that simply works better: faster settlement, portable collateral, programmable assets, and investment solutions that meet investors wherever they store their wealth. The wrapper will be invisible. The benefits will not.

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