Decoding the $19T tokenization boom: Why banks want in now

According to Bitwise data, 83% of the world’s biggest financial institutions offer at least one digital-asset service.

At first, most of this activity clustered around the obvious entry points: trading desks, custody, and eventually crypto ETPs. These were the “safe” ways to participate, familiar products wrapped around new assets.

Source: X

But here’s what you’re missing.

Tokenization has become the most common offering across institutions, showing up everywhere from Goldman Sachs and JPMorgan to Deutsche Bank and the London Stock Exchange. And unlike trading or ETPs, tokenization is about rebuilding how financial assets move, settle, and generate liquidity.

The growth projections make the change hard to ignore.

Tokenized assets are estimated to jump from just $0.6 trillion in 2025 to nearly $19 trillion by 2033. That’s a massive jump!

Source: X

Perhaps tokenization is where institutions see the long game. RWAs will meet programmable infrastructure, and crypto will stop being a side bet.

Why tokenization may be the missing piece of the puzzle

Tokenizing RWAs solves problems institutions have had for decades. It takes assets like bonds, funds, real estate, or credit products and puts them on programmable rails. That unlocks efficiency immediately.

Instead of long settlement times, constant manual checks, and multiple middlemen, tokenized transactions move faster and cost far less to process.

For large institutions dealing with huge volumes every day, even small efficiency gains can add up to significant savings.

Tokenization also makes fractional ownership easy.

A tokenized treasury bill or private credit asset can be divided into smaller pieces without altering the asset itself. This allows wider distribution, more flexible product design, and access for different types of investors, all without changing how the original instrument works.

Liquidity improves, too.

Tokenized assets can trade around the clock across global platforms, unlike traditional markets with strict operating hours. Institutions value this because constant liquidity lowers risk and makes their capital work more efficiently.

The rewiring of global markets

The long-term impact of tokenization goes far beyond making assets easier to trade.

Capital markets, for instance, could change from today’s fragmented, jurisdiction-bound systems to a more unified model where assets move across platforms with fewer middlemen and far less friction.

For banks, this means the chance to streamline everything from issuance to settlement. This will reduce costs while improving transparency and compliance.

Asset issuance itself could also see a major overhaul.

Creating a bond or private credit instrument today requires layers of paperwork and coordination. In a tokenized environment, issuance becomes programmable, faster, and accessible to a global investor base.

Institutions won’t “adopt crypto” in the cultural sense. Rather, they’ll simply use blockchain rails because they’re more efficient. And regulators are already adjusting.

What’s in the way?

For all its momentum, tokenization still has a few hurdles to clear before it becomes the default system for global finance.

Interoperability remains the biggest challenge. Private chains, public chains, and internal institutional systems often fail to communicate smoothly.

TradFi already struggles with system fragmentation and crypto cannot repeat the same pattern.

Regulation is another piece of the puzzle.

Most jurisdictions are still figuring out how tokenized assets fit into existing securities laws, investor protections, and compliance frameworks. Institutions won’t fully scale these products until the rules are clearer and more consistent across borders.

Custody models are also evolving.

Holding tokenized assets isn’t as simple as storing traditional securities, and institutions want infrastructure that’s both secure and operationally familiar. That means building systems that combine blockchain-native tools with the protections they’re used to.

Still, none of these challenges are deal-breakers.

The institutions and jurisdictions that solve interoperability, offer clear regulation, and build reliable custody will become the winners of the tokenized era.

Everyone else will eventually have to catch up.