Blog

By Jurica Dujmovic

Tokenization is unlikely to make you rich overnight. But it could make your portfolio more transparent, liquid and efficient.

Tokenized blockchain assets surged to more than $30 billion in 2025 from under $10 billion in 2023, according to on-chain data.

For individual investors, safe, accessible choices are narrower than the headlines suggest.

For years, blockchain boosters have promised that everything of value will move “on-chain.” In 2025, that futuristic vision is starting to look less like a slogan and more like a market trend. From tokenized U.S. Treasury bills to private-equity feeder funds, real-world assets (RWAs) are now being tokenized, traded and settled on blockchains, and slowly being made available to ordinary investors.

So, what does “tokenizing” an asset actually mean? Think of it as turning the investment ownership rights – for example, shares in a money-market fund or a slice of a private-equity vehicle – into a digital token that lives on a blockchain. Instead of relying on old-school paperwork, transfer agents, or settlement systems that take days, the token itself acts as the proof of ownership and can move instantly between approved investors.

In short: It’s the same underlying asset, but with a new digital wrapper that should make it easier to buy, sell and track in real time.

A market that has quietly hit tens of billions of dollars

Tokenized blockchain assets surged to more than $30 billion in 2025 from under $10 billion in 2023, according to on-chain data. Treasury-backed tokens alone accounted for $5.5 billion in April 2025, making them one of the largest and fastest-growing categories.

Who’s actually delivering products? Several financial firms have moved beyond pilot projects:

— Franklin Templeton BEN records shares of its U.S. Government Money Fund on blockchains including Polygon and Stellar. Retail investors in select markets can buy through its Benji app. The firm also launched a tokenized UCITS fund in Luxembourg.

— WisdomTree WT has built a blockchain-enabled transfer agent, WisdomTree Transfers, and offers digital funds through its WisdomTree Prime app, available in certain U.S. states.

— J.P. Morgan’s JPM Onyx unit operates the Tokenized Collateral Network, which enables institutions to move collateral more efficiently. It also took part in a cross-chain pilot with the DTCC to publish fund net asset values on-chain.

— Ondo Finance, a startup, issues tokenized Treasuries (OUSG) and yield products that have drawn over a billion dollars.

— Superstate, founded by Compound’s Robert Leshner, runs a tokenized short-term Treasury fund (USTB) and a new on-chain issuance venue for securities.

— Backed Finance issues tokenized tracker certificates on ethereum ETHUSD and Base, including tokens that mirror U.S. Treasury ETFs.

— Hamilton Lane, through Securitize, now offers tokenized feeder funds into private equity with minimums as low as $20,000 – down from the multimillion thresholds institutions typically face.

For investors, these initiatives span the spectrum: Some are strictly institutional, some are open to accredited investors, and a few – like Franklin’s Benji or WisdomTree Prime – are starting to reach the mass market.

Where tokenization works best today

The most obvious success story is short-term government debt. Tokenized money-market style funds can settle almost instantly, move 24/7, and publish holdings or NAV on-chain in real time. DTCC’s 2024 pilot with Chainlink demonstrated how fund data could be broadcast across multiple blockchains, paving the way for broader use in brokerage and retirement accounts.

Private-market funds have also seen momentum: By fractionalizing feeder vehicles, managers can broaden their investor base. But those products remain limited to accredited or qualified buyers.

Real estate has been a tougher category. For example, a company called RealT had promised investors fractional ownership of Detroit rental homes, with rental income streamed on-chain. However, a series of property management and compliance issues soon emerged, showing that tokenization can change the wrapper, but it can’t fix the off-chain realities of property management and landlord responsibilities.

What this means for you

The promise of tokenization – fractional access, faster settlement, and transparent record-keeping – is real. But for individual investors, safe, accessible choices are narrower than the headlines suggest.

— If you want tokenized cash or T-bill exposure, check whether you can access apps like WisdomTree Prime or Franklin’s Benji. These sit within regulated fund frameworks but use blockchains under the hood.

— If you are comfortable with KYC’d crypto rails, projects like Ondo Finance or Backed offer tokenized Treasury exposure. Keep in mind these tokens often restrict transfers to whitelisted wallets and can be frozen to meet securities rules.

— If you are an accredited investor, tokenized private-equity feeders may offer lower minimums but come with the usual long lockups and risk profile.

— If you are curious about real-estate tokens, diligence matters more than the tech. You’re still dependent on property managers to collect rent, fix boilers and pay taxes.

In other words, tokenization doesn’t change the fundamental question: What exactly are you buying, and who stands behind it?

Why it matters

Behind the jargon, tokenization addresses real frictions in finance. Traditional settlement is T+2 for equities and T+1 for many funds and bonds. Tokenized assets can settle nearly instantly, eliminating many “failed” trades and cutting collateral needs. J.P. Morgan’s blockchain unit Kinexys has shown how atomic settlement of cash and tokenized assets can work in repo and collateral markets. And in Singapore, the central bank’s Project Guardian has expanded from pilots to broader industry collaborations.

Programmable smart contracts also allow for continuous accrual of interest, automatic fee distribution, and even real-time auditability. Some issuers now publish funds’ net asset value (NAV) directly to blockchains on a near-continuous basis.

The speed bumps

Regulation remains the main constraint. In Europe, the new Markets in Crypto-Assets (MiCA) law is fully in force, but excludes tokenized securities, which still fall under MiFID II. Hong Kong’s Securities and Futures Commission has issued circulars on tokenized products. Singapore’s Monetary Authority is moving pilots toward real frameworks. Translation: these products are governed by securities law first, crypto second.

Standardization is another challenge. Citigroup (C), Deutsche Bank (DB) and others have called for global frameworks to avoid fragmentation as tokenized funds proliferate.

And finally, risk doesn’t vanish. Smart contracts can be buggy; custodial wallets can fail; and the underlying asset – whether a Treasury bill or a rental house – still carries its traditional risks.

Read: Some of the largest exchanges and financial institutions are embracing betting platforms and crypto. Is it just for the fees?

What to watch next

For retail investors, the next few years may bring more mainstream wrappers: brokerages tapping into tokenized money-market funds, ETFs recording shares on-chain, and possibly retirement products with tokenized back-ends. The underlying technology is being laid now.

Tokenization is unlikely to make you rich overnight. But it could make your portfolio more transparent, liquid and efficient. For now, the smartest approach is to treat tokenized assets the way you would any new product: Read the disclosures, know the legal wrapper and understand the risks. The tech may be new; the investor’s homework is the same as ever.

More: ‘We’re in a market bubble based on AI exuberance’: I’m moving my $200K IRA to a money-market account. Is that wise?

Also read: AI isn’t the solution to financial fraud – it actually might be the biggest problem

-Jurica Dujmovic

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

  (END) Dow Jones Newswires

  10-18-25 0958ET
Copyright (c) 2025 Dow Jones & Company, Inc.

By Mark Hulbert

Fed plans to end its ‘quantitative tightening’ – but stocks do better under those conditions

Federal Reserve Chair Jerome Powell said the central bank will end its bond purchases soon.

The economy and the stock market may eventually respond favorably to the change of policy, but if history is any guide, things will get worse before they get better.

U.S. Federal Reserve Chair Jerome Powell has announced that the Fed will soon end its balance sheet reduction program, known as quantitative tightening, or QT. But this policy shift isn’t the bullish stock-market driver most investors believe it is.

Of course, the Fed’s decision is meaningful; the central bank has been draining a large amount of liquidity from the financial system. Since some of that liquidity otherwise would have found its way into equities, QT presumably has been a significant headwind for the stock market: Since June 2022 the Fed has shrunk its balance sheet by $2.2 trillion. It seems plausible that ending it should provide a big boost for the stock market.

Yet history suggests just the opposite. Over the past two decades, the stock market has done better during QT periods than when the Fed was injecting liquidity into the markets – quantitative easing (QE).

Just take the most recent QT phase since June 2022. During this period in which the Fed drained $2.2 trillion from the financial market, the S&P 500’s SPX total return index has risen at the annualized rate of 20.9%, about twice its historical average.

This recent experience is the rule rather than the exception. Since 2003, the S&P 500’s average gain has been 16.9% during 12-month periods in which the Fed’s balance sheet was shrinking. That compares to an average gain of 10.3% during 12-month periods in which the Fed’s balance sheet was expanding.

What is the source of this inverse correlation between Fed balance sheet growth and the stock market? It has to do with what’s going on in the U.S. economy when the Fed decides to expand or shrink its balance sheet. When the economy is slumping, the Fed will flood the markets with liquidity in hopes of turning the ship around. Since that takes time, the economy typically will weaken while the Fed is expanding its balance sheet.

Notice from the chart above that the Fed hugely boosted its balance sheet during the 2008 Global Financial Crisis and during the recession that accompanied the Covid-19 pandemic lockdown. The stock market suffered severe bear markets during those times of QE.

The same story in reverse applies to the past couple of years. It was precisely because the economy was so strong that the Fed felt comfortable draining liquidity from it.

This puts a surprisingly bearish spin on Powell’s announcement this week that the central bank was ending the three-plus year period of QT. This suggests we’re entering a period of economic weakness. The economy and the stock market may eventually respond favorably to the change of policy, but if history is any guide, things will get worse before they get better.

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com

Also read: Not every dip is a buying opportunity. Here’s how to think about future stock-market pullbacks.

More: Bitcoin just lost more than stocks did in the 1929 market crash. It won’t be the last time.

-Mark Hulbert

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

  (END) Dow Jones Newswires

  10-18-25 0958ET
Copyright (c) 2025 Dow Jones & Company, Inc.