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Key takeaways:
- Conditions are more favorable to tokenization than ever before due to the convergence of six forces ranging from technology and regulatory clarity to institutional adoption.
- PwC sees tokenization as the foundation of the next generation of investment management, fundamentally transforming how funds are structured, distributed, and operated.
- PwC expects tokenized fund AUM to grow at a 41% CAGR to $715 billion globally by 2030.
- Asset managers can accelerate their tokenization efforts by first tackling three speedbumps: governance, settlement, and liquidity.
Tokenization stands at a pivotal inflection point in the evolution of global financial markets. It began as a speculative concept tied to the rise of Bitcoin and blockchain technology, but it’s maturing into a tangible, tested, and strategically critical capability for asset and wealth management firms. The convergence of durable technology, regulatory clarity, and institutional adoption creates conditions that are more favorable to tokenization than ever before.
At its simplest, tokenization digitally represents asset ownership on a programmable ledger. Tokenization’s value, however, lies in its enablement of faster ownership transfer, new forms of ownership, and automation of both markets and a firm’s operations. Once an asset (or a claim on an asset) is represented as a token, you can transfer it more easily, embed rules around who can hold it, and automate the asset’s life cycle.
PwC expects tokenized fund AUM to grow at a 41% CAGR to $715 billion globally by 2030, based on our November 2025 survey of managers, investors, and distributors. Over 40% of managers taking part in the survey say tokenization will be their most important future product innovation. (For details on the mechanics of tokenization, see PwC’s Tokenization in financial services: Delivering value and transformation.)
This bolsters our view that tokenization should be central to an asset manager’s strategy and business model. In the last few years, both traditional and alternative asset managers have launched tokenized funds. Based on those early successes and other evolutionary changes, we believe asset managers should realign their business models around what we call Universal Asset Access, which would give investors access to a broader range of global assets.
For asset managers operating across both regulated and private funds, we see tokenization becoming the foundation of the next generation of investment management, significantly transforming how funds are structured, distributed, and operated. Tokenization can reduce reliance on fragmented, intermediary-dependent infrastructure with a seamless token-based ecosystem where settlements execute instantaneously, compliance is embedded within the token architecture, and fractional ownership opens both public and private markets to a broader global investor base.
Tokenization can reduce reliance on fragmented, intermediary-dependent infrastructure with a seamless token-based ecosystem where settlements execute instantaneously, compliance is embedded within the token architecture, and fractional ownership opens both public and private markets to a broader global investor base.
Why tokenize assets?
Asset managers see tokenization strengthening distribution, helping reshape operating economics, and accelerating product innovation in four main ways.
Expand demand and distribution
Tokenization can expand reach to global and digital-first investors and support new distribution models such as digital subscription and continuous market access. For example, 52% of hedge funds express an interest in tokenization in our survey. Multiple managers have tokenized money market funds where fund shares are issued and held in digital-native form, demonstrating how tokenized interests can be distributed via blockchain-based rails. For continuous digital markets, tokenized fund interests can also better align with extended operating expectations by allowing eligible holders to hold and move positions in digital-native form, subject to transfer restrictions.
Generate operational benefits
Tokenization can deliver structural transformation that protects margins through transparent and immutable record-keeping and “atomic” settlement. This can matter for high-velocity treasury use cases where reserve and collateral assets should be mobilized, verified, and settled with less operational friction. One asset manager operates a blockchain-based fund structure where the share register is maintained on-chain, illustrating the potential to help reduce reconciliation and improve auditability. Meanwhile, digital ledger technology (DLT)-based settlement initiatives in areas like repo/collateral have demonstrated the feasibility of near real-time settlement workflows.
Accelerate product innovation
Tokenization can accelerate the creation of bespoke instruments (whether SMAs, sleeves, or custom indexes), automate the allocation of income flows, and reduce asset servicing friction. In alternatives, several managers launched tokenized feeder structures, where an investor’s interest is represented by digital tokens. That helps strengthen distribution options and create a pathway toward more efficient transferability within fund documentation and eligibility controls.
Learn this new way of operating
Tokenization workflows can be very different from traditional ones. This raises new liquidity management, customer verification, and authorization risks. Firms should become familiar with these changes to help reduce their learning curve as tokenization goes mainstream. Even controlled launches typically require new operating procedures around wallet workflows, smart contract controls, whitelisting, and transfer restrictions—capabilities that are built through a pilot rather than at scale.
Six forces shaping tokenized funds and tokenized real-world assets
Momentum behind tokenization is being driven by six forces that are converging and reinforcing each other, though not uniformly or simultaneously: Technology maturity, operational benefits, regulatory clarity, institutional adoption, market demand and DeFi integration. No single catalyst explains tokenization's current momentum. Rather, a set of long-building trends is reaching a critical mass simultaneously, and together they are rewriting the economics and operating models of asset management. These six forces show why the tipping point has arrived—and why standing still is no longer a neutral choice.
1. Technical maturity: Infrastructure ready for institutional scale
Early blockchain ecosystems had scalability, security, interoperability, and user experience deficiencies. But now, certain blockchains are increasingly enterprise-grade and capable of supporting institutional finance. With this foundation in place, tokenization is shifting from an experiment to a platform, enabling institutions to move from “proof of concept” to building product and operating models that scale.
2. Operational benefits: Efficiency gains help reshape fund management economics
Based on that technical foundation, tokenization’s operational benefits begin to appear, enabling structural operating model transformation. Asset managers and asset servicers are helping reduce costs, improve speed, enhance transparency, and offer superior investor experiences, which creates operational alpha in a competitive, low-margin industry.
3. Regulatory clarity: From ambiguity to action
Increasing US regulatory clarity for digital assets removes a major barrier to mass adoption and positions tokenized funds and real-world assets (RWAs) as legitimate components of the financial system. In PwC and AIMA's recent hedge fund survey, 52% of hedge fund respondents expressed interest in tokenization, but many of them cited legal uncertainty as a barrier.
4. Institutional adoption: The ultimate validation signal
When large financial institutions commit resources, brand reputation, and client relationships to tokenization, it cascades through the industry, shaping conventions around technology, operating models, and distribution. And where bellwethers move smaller asset managers, regional banks, and fintech platforms follow, creating a self-reinforcing adoption cycle.
5. Market demand: The ultimate arbiter of any financial innovation
The convergence of crypto-native capital seeking yield, a new generation of digital-first investors and traditional investors seeking efficiency creates a diversified demand base for tokenized products. More than 80% of respondents believe tokenization will boost global reach and 24/7 accessibility within the ETF market over the next three years, according to PwC's ETFs 2030: Capitalizing on disruptive innovation.
6. DeFi integration: Bridging traditional finance and decentralized finance
One of the most uniquely powerful aspects of tokenized funds and RWAs is integration with decentralized finance. DeFi is a blockchain-based platform replicating functions like trading, lending, and collateral management, but often without intermediaries. Platform integration can create liquidity and utility that's not possible in traditional financial infrastructure.
How should firms responsibly enable tokenization?
Tokenization may not be a problem of technology but fitness. The asset-management industry developed over 50 years around many separate databases, reconciled over days, governed by humans, moving at the speed of paper. A fast, shared, automated record on top of the old system is what’s often slowing firms down. Participating responsibly in tokenization means getting over these speedbumps before scaling up.
Three tokenization speedbumps to overcome |
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GovernanceThe new system automates rules, but a fund's most important decisions can't be automated.Smart contracts can enforce certain rules, but they can't exercise fiduciary judgment. Fund boards should still approve certain things. The on-chain money funds show the pattern: The authoritative record lives on the shared ledger, but people are accountable for the board minutes, fiduciary decisions, and regulatory filings. The questions now are which decisions will you automate, which will you keep human, and is that map written down and reviewable by a regulator? |
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SettlementTokenized settlement system is fast, but the plumbing it plugs into is slow. In a tokenized fund, it can take mere seconds to change the ownership record, but the cash, accounting, tax records, and regulatory reports run on a traditional schedule. Firms advertising "instant settlement" without rewiring their back office could create reconciliation breakdowns, not faster settlement. The approach of market leaders is to allow the ownership token to move fast on the shared record while the custodian handles the cash leg on a conventional cadence. The questions now are whether custodians need the final say on possession of digital assets, where do you want to be faster and what in your back office has to change to deliver instant settlement? |
LiquidityTokenized systems can trade around the clock, but your funds do not. Private credit liquidity is quarterly. Private equity is multi-year. Putting those funds on a 24/7 rail doesn’t change their redemption schedule, but it can make the timing and market depth issues visible to investors. This is where sales and legal may quietly disagree and where regulatory problems begin. Market leaders who are tokenizing feeder funds didn’t promise daily liquidity. Instead, it’s used to help lower minimums, simplify subscriptions, and enable whitelisted transfers. The promise was access, not liquidity. The questions now are whether you are selling liquidity you can’t deliver, access you couldn't previously offer, or operational efficiency? |
Every step you take to tokenization matters
To scale up tokenization, start with governance, then move to settlement, then liquidity. Firms that start with technology are likely to stall. A practical 12-month plan often looks like this.
Phase 1, month 1: Decide what you are trying to do. Produce a one-page governance map (automated / assisted / fully human) and four legal memos: 1940 Act, ERISA, custody, and tax. Board vote at day 30: Proceed or pause?
Phase 2, months 2–3: Choose the product, partner, and custodian. Decide what to tokenize: A tokenized money-market share class if you have a money fund or a tokenized feeder if you don't. Run a structured vendor bake-off. Decide custody. Board vote at day 90: Approve a pilot charter with five written numbers: notional, investor count, counterparty count, duration, and named anchor investor.
Phase 3, months 4–6: Build the safety net. This includes outside audits, independent security reviews, compliance integrations, and tested incident-response runbook. Audit committee vote at day 180: Go live or remediate.
Phase 4, months 7–12: Run the pilot, watch five numbers, decide. These five numbers are important: Settlement quality, incidents, reconciliation breaks, investor satisfaction, and cost per dollar of AUM. Board vote at day 365: Scale, pivot, or pause with a required second vote before growing beyond the charter's original limits.
If you treat tokenization as a technology choice, you may spend two years integrating software with little to show. But a firm that crosses the three speedbumps can, within a year, have a production program worth scaling or a documented, board-approved reason to stop.
By converting fund interests, capital commitments and underlying asset holdings into programmable digital tokens, asset managers can automate the fund life cycle—from capital calls, waterfall distributions, and investor reporting to subscriptions, redemptions, and regulatory compliance—reducing the manual, error-prone operations that consume enormous resources today. For asset managers bold enough to embrace it, tokenization is not simply the next evolution of financial technology—it’s the new financial ecosystem itself, and those who build their businesses upon it can help define the future of asset management.
Minting the future: Asset tokenization is ready for its big moment
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