Tokenized Assets: The Next Big Trend in Finance and Investing?
Blockchain-based tools could streamline trading in stocks, real estate and other assets.
Key Takeaways
Asset tokenization — the process of creating digital tokens to represent traditional assets — could create major efficiencies in finance and investing.
Tokenization aims to remove intermediaries, reduce transaction costs, speed up transactions and increase liquidity.
This approach could boost results for financial companies and give investors access to previously inaccessible assets.
Blockchain — the technology that enables cryptocurrency— can also make it faster, easier and cheaper to buy and sell nearly any asset online.
Asset tokenization creates digital tokens that represent tangible and intangible assets, including stocks, bonds, funds, real estate, intellectual property, artwork, gold, and even collections of whiskey and wine.1
Investors can trade these tokens on a blockchain with little or no involvement from intermediaries. You buy the token yourself, and you own the underlying asset.
Proponents argue that tokenization will revolutionize the world of finance and investing by reducing transaction costs, accelerating transactions and boosting liquidity. According to one report, tokenized assets are projected to grow from approximately $600 billion today to $18.9 trillion by 2033, as illustrated in Figure 1.2
Figure 1 | Asset Tokenization Could Expand Swiftly
Data and estimates as of 4/7/2025. Source: Ripple and Boston Consulting Group.
The belief that asset tokenization and blockchain technology could transform how people invest isn’t just held by crypto enthusiasts. Established financial companies like JPMorgan Chase, Robinhood and Coinbase also see the potential of these innovations and are developing new ways for investors to access and trade assets using blockchain-based platforms.
However, asset tokenization presents its own risks and challenges, as regulations governing this market are still evolving.
If tokenization takes off, it could boost efficiency for financial firms, improve their profit margins, increase their stock values and potentially benefit investors as well.
Additionally, tokenization can reduce costs for investors and provide them with access to assets that were previously out of reach.
How Asset Tokenization Works
To understand asset tokenization, let’s review the typical steps involved in buying a stock:
Using your account with a broker or trading platform, you place an order specifying what you want to buy and how much you’re willing to spend.
The broker (or trading platform) then routes your order to a venue where it can be matched with a seller. This might be a stock exchange, a market maker, the broker’s own inventory or another source.
Once a match is confirmed, your trade moves to clearing and settlement.
A third party, sometimes called a clearinghouse (such as DTCC in the U.S.), verifies all trade details and helps manage counterparty risk. Do the two parties agree on the terms? Does the buyer have the agreed-upon funds? Does the seller actually own the asset?
If everything lines up, the clearinghouse transfers your money to the seller’s account. It also transfers ownership of the stock from the seller to you, the buyer. This process usually takes one to two days.
Typically, the stock doesn’t change hands physically. That’s because it’s held by a custodian, another intermediary that securely holds assets like this.
Most of this process goes unnoticed by buyers and sellers. However, each of these intermediaries — brokers, clearinghouses, custodians and others — imposes a fee.
Asset Tokenization vs. Traditional Investment Approaches
Tokenization transforms this process by creating digital tokens that represent real-world assets like stocks.
You can think of the token as a digital wrapper that represents a claim to a real-world asset. Once the token exists, it can be traded over a blockchain.
A blockchain is a distributed, decentralized ledger with copies stored on computers and servers (known as nodes) worldwide. It’s what makes cryptocurrency function. When you send a Bitcoin to someone, the blockchain network updates to show that Person A paid 1 Bitcoin to Person B.
Returning to our stock example, trading tokenized assets resembles the traditional system of brokers and exchanges, but with a few key differences.
First, you create an account on a digital asset exchange or tokenized trading platform. Companies like Coinbase operate these marketplaces, and they can make the trading experience easier. They use blockchains to hold and move assets.
You fund your account with some type of currency, such as U.S. dollars or crypto.
Next, you use the exchange to place an order to buy a tokenized asset.
The exchange then searches for a matching seller. Most digital asset exchanges match orders within their own order books, rather than routing them to multiple venues like traditional brokers do.
After a match is found, the exchange executes the trade and handles the clearing and settlement, including releasing payment, transferring the token to your digital wallet and recording the transaction on the blockchain.
All of this occurs in seconds or minutes, much quicker than a traditional stock settlement that can take one to two days.
This general approach can be applied to many other assets. The process of asset tokenization involves creating a digital token to represent ownership interest in nearly any type of asset, including:
Physical assets like real estate, art and gold.
Financial assets such as stocks, bonds and private equity.
Intangible assets like patents and other intellectual property.
How Blockchains Enable Tokenized Assets
Blockchain is the underlying technology that enables the secure and efficient trading of digital tokens.
Whenever a blockchain records new transactions, all copies of the ledger also update. Instead of editing old entries, the network adds new entries (blocks), which are only accepted once enough nodes agree according to the blockchain’s rules.
No individual or entity can modify a public blockchain on their own. Because of this design, it’s difficult to tamper with a well-secured blockchain. For many users, this leads to greater trust in blockchain transactions.
Blockchain transactions can also include smart contracts, which are self-executing programs stored on the blockchain. These contracts automatically execute specific actions when certain conditions are met. For example, a smart contract can trigger a payment after an order status is updated to “delivered.”
In these tokenized transactions, smart contracts can perform a significant amount of the behind-the-scenes work that a clearinghouse or back office typically handles in a traditional system. This includes verifying a buyer’s ability to pay, releasing funds and transferring ownership of an asset once the conditions are met.
What Are the Potential Benefits of Tokenized Assets?
Tokenization could be particularly useful for illiquid assets like art, collectibles or private investments, which typically don’t trade often.
However, tokenization can also benefit assets that are already liquid because it offers multiple advantages, including:
Faster transactions. Blockchain settlements can occur in seconds or minutes, compared to the one- to -two-day clearing period of traditional financial systems.
Reduced costs. Transactions generally require fewer intermediaries. As a result, transaction and administrative fees are expected to decline.
Greater accessibility. Tokenized assets can change hands 24/7. Users aren’t restricted to business hours.
Lower barrier to entry. Tokens can be fractionalized, or divided into smaller units that can be traded. This allows less wealthy investors to buy a portion of illiquid assets such as artwork or real estate.
Enhanced liquidity. Easier, 24/7 global trading can make historically illiquid assets more tradable and accessible, broadening the pool of potential buyers and sellers.
What Are the Risks Associated with Asset Tokenization?
Regulatory Uncertainty
Existing laws may not always be a perfect fit for something as new as tokenized assets. Some countries and international bodies have tried to develop rules, but these frameworks may be incomplete or untested.
In July 2025, the U.S. Securities and Exchange Commission reiterated that tokenized securities remain securities, which means they must comply with existing securities laws. But the SEC also signaled that it’s open to working with the industry to develop exemptions or new rules.3
Potential Volatility in Tokenized Asset Prices
Illiquid assets like artwork, collectibles or private companies can sometimes be hard to value. As a result, their corresponding tokens could fluctuate sharply in price, depending on the market conditions.
Investor Awareness
Investors who purchase exchange-traded funds (ETFs) or mutual funds typically understand the risks involved. However, they may not be as familiar with tokens or the assets these tokens represent. This lack of familiarity could lead to a greater risk of overpaying or difficulty selling illiquid tokens.
Tokenization in Action: Real-World Examples
Tokenized Securities
Companies create tokens for stocks, bonds, ETFs and similar assets, allowing investors to trade them on the blockchain.
In June 2025, Robinhood started offering tokenized U.S. stocks and ETFs to European investors, making it easier for people outside the U.S. to invest.4
Last year, JPMorgan Chase rolled out a digital service for issuing, settling and recording ownership of municipal securities.5
In 2024, BlackRock announced the launch of a tokenized money market fund.6
Tokenized Physical Assets
Beyond securities, early movers are starting to offer tokenized assets across a range of other categories.
Dubai announced a tokenization program for real estate earlier in 2025, focusing on ready-to-own properties.7
In 2021, Switzerland-based Sygnum Bank and art investment firm Artemundi tokenized a Pablo Picasso painting, “Fillette au Béret.”8 The project offered fractionalized tokens, allowing dozens of buyers to own a share of the painting.
Tokenized Assets as Collateral
One analysis estimates that the world has about $255 trillion in marketable securities that could potentially be used as collateral for loans and other financial transactions. But only about 10% is being used.9
Tokenization could make it easier to put those assets to work.
Euroclear, a provider of post-trade services, and Digital Asset, a blockchain tech firm, are collaborating to develop a blockchain-based system that enables secure, real-time mobility of tokenized collateral across global markets.10
Unlocking the Future: Tokenized Assets Pave the Way for Next-Gen Finance
We see significant potential in tokenized assets, especially for companies that enable or facilitate the tokenization process.
Stablecoin issuers may also gain an edge if investors use their currencies to buy tokenized assets.
Alternative asset managers could benefit from tokenized versions of traditionally illiquid assets, improving liquidity, transparency and settlement speed for their portfolios.
While tokenized assets may pose risks, they aim to streamline finance and investing while also expanding investor access. In our view, their strengths make them a compelling opportunity in the evolution of digital markets.
Authors
Investment Analyst
Senior Client Portfolio Manager
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Cask Capital, accessed November 18, 2025.
Ripple and Boston Consulting Group, “Approaching the Tokenization Tipping Point,” April 7, 2025.
Hester M. Peirce, “Enchanting, but Not Magical: A Statement on the Tokenization of Securities,” U.S. Securities and Exchange Commission, July 9, 2025.
Robinhood, “Robinhood Launches Stock Tokens, Reveals Layer 2 Blockchain, and Expands Crypto Suite in EU and U.S. with Perpetual Futures and Staking,” June 30, 2025.
JPMorganChase, “JPMorganChase Launches the Digital Debt Service with the First Live Municipal Blockchain-Based Bond Issuance in the U.S.,” November 12, 2024.
Vicky Ge Huang, “BlackRock Launches First Tokenized Fund on Ethereum Blockchain,” Wall Street Journal, March 20, 2024.
Government of Dubai, “DLD Launches the MENA’s First Tokenized Real Estate Project through the ‘Prypco Mint’ Platform,” May 25, 2025.
Sygnum Bank, “Sale of Picasso Painting Tokenized by Sygnum Brings Significant Returns for Tokenholders,” May 25, 2023.
Yuval Rooz, “How Tokenization Is Transforming Global Finance and Investment,” World Economic Forum, December 10, 2024.
Euroclear, “Euroclear & Digital Asset to Mobilize Collateral Assets,” February 24, 2025.
References to specific securities are for illustrative purposes only and are not intended as recommendations to purchase or sell securities. Opinions and estimates offered constitute our judgment and, along with other portfolio data, are subject to change without notice.
Diversification does not assure a profit nor does it protect against loss of principal.
Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.
The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.