Wall Street is no longer treating tokenization as a blockchain experiment. BlackRock, JPMorgan, Franklin Templeton and other financial institutions are putting funds, government debt and other traditional assets on public blockchain infrastructure, creating markets that can potentially settle around the clock.

The numbers show how quickly the category is expanding. The broader tokenized-asset market has grown from around USD 2 billion in March 2024 to more than USD 38 billion, while tokenized US Treasuries have increased from USD 721 million to roughly USD 16 billion.

Tokenized Funds are Becoming Institutional Products

BlackRock expanded its tokenization strategy in August with two new money-market products. Its first major tokenized fund, BUIDL, already manages more than USD 2.6 billion.

The change is not limited to digitally representing ownership. Tokenized assets are increasingly becoming usable financial instruments.

BlackRock's BUIDL, for example, can be used by qualified investors as trading collateral through infrastructure involving OKX and Standard Chartered while continuing to generate yield. That turns a tokenized Treasury product into both an investment and a programmable collateral asset.

Blockchain Can Change How Assets Settle

Traditional financial transactions can require brokers, custodians, clearing systems and settlement windows. Tokenization can compress parts of that process by recording ownership and transfers directly on blockchain infrastructure.

The potential advantages include 24/7 transfers, fractional ownership and programmable settlement. These features could be particularly valuable for collateral since an approved tokenized asset can potentially move between financial applications without waiting for conventional market infrastructure to reopen.

Real-world assets are also moving deeper into decentralized finance. According to CoinShares and Token Terminal data, deposits of tokenized real-world assets into lending platforms and decentralized exchanges increased from USD 2.3 billion to USD 7.4 billion between Q2 2025 and Q2 2026.

Ethereum and Solana are Competing for Institutional Activity

Ethereum remains the largest blockchain for tokenized finance. Its institutional data portal reports about USD 17.4 billion in real-world assets on Ethereum Layer 1 and USD 158 billion in stablecoins.

Solana is also gaining ground. Its real-world asset value reached USD 3.73 billion by the end of July, with more than 313,000 addresses holding tokenized assets.

Tokenization Does Not Remove Traditional Risks

A blockchain token is only as valuable as the legal claim behind it. Investors still depend on issuers, custodians, reserve assets and enforceable ownership rights. That makes regulation and asset structure as important as blockchain speed.

What Comes Next

Tokenization's larger opportunity is not simply recreating stocks and bonds as tokens. It is making regulated financial assets transferable, programmable and usable as collateral across interconnected markets. If that infrastructure scales, blockchains could increasingly function as settlement rails beneath traditional finance.

Also Read: Who Pays Ethereum When Rollups Move Transactions Off-Chain?

FAQs:

1. What is financial asset tokenization?

Tokenization represents ownership or rights to a traditional asset through blockchain-based tokens. It can be used for assets such as government debt, investment funds and other regulated financial instruments.

2. How large is the tokenized-asset market?

The broader tokenized-asset market has grown from around USD 2 billion in March 2024 to more than USD 37 billion. Tokenized U.S. Treasuries alone have increased from USD 721 million to roughly USD 16 billion.

3. What is BlackRock’s BUIDL fund?

BUIDL is one of BlackRock’s major tokenized funds and manages more than USD 2.6 billion. Qualified investors can also use it as collateral through supported institutional infrastructure while continuing to earn yield.

4. Why are Ethereum and Solana important for tokenization?

Ethereum currently hosts about USD 17.4 billion in real-world assets on Layer 1 and USD 157 billion in stablecoins. Solana’s real-world asset value has reached about USD 3.73 billion, showing growing institutional competition.

5. What risks remain with tokenized assets?

Tokenization does not remove issuer, custody, legal or regulatory risk. Investors still depend on enforceable ownership rights, reserve structures and reliable counterparties behind the underlying asset.