Wall Street: 84% of Financial Institutions Recognize Tokenization as a Core Strategy

Wall Street is defining 'tokenization' as the next-generation financial infrastructure and is accelerating its adoption. According to a survey, 84% of U.S. financial institutions recognize this technology as a core strategy. The Broadridge survey indicates that the financial sector is preparing for a future where 'tokenized assets' are integrated into market structures. Tokenization is a technology that converts ownership of physical assets into blockchain-based digital tokens, providing efficiency by reducing transaction settlement times, lowering costs, and allowing for finer asset divisions for trading. Over the past two years, the tokenization market has grown rapidly, with BlackRock and Franklin Templeton launching tokenized U.S. Treasury funds and money market funds, respectively. JP Morgan is expanding its blockchain payment system through the 'Kinexys' platform, and DTCC has executed its first real transaction using tokenized securities. 68% of survey respondents anticipate that tokenization will reshape the financial market structure within the next 3 to 5 years, and about one-third plan to increase their tokenization-related investments by at least 26% over the next two years. Financial institutions are opting for a 'coexistence model' rather than a complete blockchain transition, with 92% expecting digital assets and traditional assets to coexist. The market predicts that tokenization will first establish itself in the 'fund market,' with about 80% of respondents forecasting that tokenized mutual funds and money market funds will hold significant shares within the next five years. However, 'regulatory uncertainty' and technical and operational complexities are identified as major obstacles.

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