Tokenization is becoming a key focus in the transition to a digital economy, as more financial institutions adopt blockchain-based solutions. According to Joel Hugentobler of Javelin Strategy & Research, tokenization allows real-world assets such as property deeds and stocks to be digitized and settled on blockchain, offering greater transparency, faster transactions, and lower fees. This capability enables fractional ownership, making previously illiquid investments more accessible. Institutions like Franklin Templeton have already adopted platforms such as Solana, which offer higher transaction speeds and lower costs than Ethereum. Central banks, including the Bank of England, have also begun to explore tokenization’s potential.
Tokenization’s projected compound annual growth rates range from 400% to 4000%, and there are no signs of slowing down. Hugentobler noted, "The number of companies that have launched funds on chain has seen like a 10X in just a couple of years." Major firms such as BlackRock and Citadel Securities are also examining ways to optimize trading and settlement processes through tokenized systems. Citadel, which once avoided crypto, is now listed as a market maker on platforms like Coinbase. These changes reflect a broader shift in sentiment on Wall Street. Hugentobler also emphasized that financial institutions need to act now, as delaying could mean losing first-mover advantages. However, with seasoned players already in the space, they don’t have to navigate the shift on their own.
