Tokenized Funds Set To Reach $235B By 2029
The global asset management industry is on the brink of a massive transformation, with tokenized funds expected to surge from $4 billion in 2024 to $235 billion by 2029, according to a white paper from Calastone. This represents an astonishing 58-fold increase within just five years.
The report, based on surveys of asset managers and DeFi/Web3 platforms, highlights growing consensus that tokenization—the process of turning ownership rights into digital tokens on a blockchain—offers key advantages. 65% of managers already experimenting with tokenized funds report benefits such as greater automation, improved liquidity, and access to new investor bases.
“DeFi has created a new class of platforms and investors seeking trusted products that fit digital-native systems,” said Adam Belding, Chief Technology Officer at Calastone. “Tokenization is the bridge, enabling asset managers to deliver products usable within the DeFi ecosystem.”
Money Market and Private Asset Funds at the Forefront
Money market funds and private asset funds are identified as top candidates for tokenization. Among DeFi and Web3 platforms, 80% believe tokenized money market funds could enhance treasury management. Half of these platforms expect at least a 25% increase in tokenized holdings by 2030. For digital-native firms, such funds provide a regulated, yield-bearing alternative to stablecoins.
Major institutions are also moving into tokenization. JPMorgan’s Tokenized Collateral Network is an example of using tokenized assets, including money market fund shares, to streamline collateral management and settlement.
The momentum is spreading: while only 13% of asset managers currently plan to launch tokenized funds within a year, that figure is forecast to rise to 28% by 2030.
A New Era of Digital Distribution
The rise of tokenized funds is part of the broader digital transformation in finance. Asset managers are increasingly shifting to more efficient distribution channels, with digital platforms and exchanges leading the way. The Asia-Pacific region stands out as the fastest-growing market, with 85% adoption, compared to 77% globally.
Regulatory uncertainty remains a challenge. While jurisdictions like Singapore, the UK, and Hong Kong are advancing frameworks for tokenized assets, a global standard is still lacking. Interoperability between blockchain systems and traditional infrastructure also poses hurdles.
Nevertheless, the growth trajectory looks unstoppable. Tokenized funds promise benefits ranging from democratizing access to illiquid assets to enhancing efficiency and transparency. As technology matures and regulation solidifies, tokenized funds are poised to move from the periphery into the mainstream of asset management, reshaping the financial landscape for years to come.
Disclaimer: The content above reflects the author’s personal views and does not represent any official position of Cobic News. The information provided is for informational purposes only and should not be considered as investment advice from Cobic News.