by Dan McEvoy
Spot crypto ETPs made headlines two years ago, seemingly heralding a full institutional embrace of DeFi technologies. But while mainstream financial interest in crypto has stalled over recent months, product tokenisation is building a head of steam. For institutions dipping their toes into the possibilities that tokenisation offers, tokenising existing (and relatively low-risk) products such as Treasury or money market funds is a natural starting point. Meanwhile, the evolution of the infrastructure surrounding the tokenisation of real-world assets ought to encourage future innovation.
2024 was supposed to be a watershed year for institutional adoption of DeFi technology. The SEC’s approval of spot Bitcoin ETFs in January saw the biggest names in traditional finance – BlackRock, Fidelity and Invesco among them – piling in with new products. Bitcoin ETFs were an instant hit; BlackRock’s IBIT became the fastest ETF ever to reach $10bn in AUM[1] . With so much institutional backing, the future seemed to be guaranteed: big finance had bought in, and there was no going back.
Despite all the success of crypto ETFs, though, they haven’t yet brought about the kind of systemic shift that might have been expected at the time. Global crypto ETP flows in 2025 fell short of 2024 levels[2] , and no new spot Bitcoin ETPs have been launched since the original ten. TradFi institutions are still hesitant towards crypto: a GlobalData survey recently found no change in institutional crypto adoption between H1 and H2 2025[3] . This, of course, hasn’t been helped by a weak period for crypto prices. But therein lies the problem. Crypto products’ future growth is, and will likely always be, tied to the volatile fortunes of the crypto market itself. But beneath the surface, TradFi institutions are embracing the potential of digital assets, and a more enduring shift in institutional DeFi adoption is underway.
“The digital asset trend has shifted from a focus solely on cryptocurrencies, like Bitcoin and Ethereum, to exploring the tokenisation of all assets,” said Amy Oldenburg, Head of Digital Asset Strategy at Morgan Stanley[4] . “Our industry is now exploring how blockchain technology can deliver value in all areas of our business. “While these themes have led headlines, we are still in very early innings,” Oldenburg added.
Rather than pursuing new standalone crypto experiments, financial institutions are finding their feet by tokenising existing products – particularly money market funds. Amundi, Nasdaq and HSBC have taken tentative steps into tokenised funds, and recent months have seen a further wave of institutional adoption and expansion.
There are already nearly $35bn Charles Schwab[5]. Most of these are money market funds gold tokenised equities. While not as rapid or as eye-catching as the launch of new crypto products, further rollout of tokenised money market funds and an evolving tokenisation infrastructure is laying the groundwork for something potentially more significant and enduring over the long term.
More funds tokenise
In February, Aviva Investors announced a partnership with on-chain specialists Ripple[6]which aimed to expand tokenisation of traditional fund structures. The aim is to bring more of Aviva’s products onto Ripple’s public, open-source blockchain XRP ledger (XPRL). Jill Barber, Chief Distribution Officer at Aviva Investors, highlighted that tokenisation brings significant benefits to investors though time and cost efficiency, while Ripple’s Vice President of Trading and Markets, Nigel Khakoo, added that the move represented a shift in tokenisation “from experimentation to large-scale production”, with institutions increasingly focused on deploying regulated financial assets at scale.
The announcement followed BUIDL on the Uniswap DeFi platform back in February[7]. BUIDL is already a key part of the tokenised fund landscape, accounting for $2.4bn of the $33.5bn combined market cap of all tokenised funds, according to Token Terminal data as of 9 April[8] . Circle's USYC, a DeFi-native money market fund, accounts for another $2.7bn, underscoring the extent to which these products are, at present, the most widely-tokenised types of fund.
Last year, Franklin Templeton’s[9] Head of Innovation Sandy Kaul explained why money market funds are particularly well-suited to tokenisation: they are, she observed, much like stablecoins in that they seek to maintain a net asset value of $1 per share, are transferable wallet-to-wallet, can be posted as collateral on most crypto exchanges and can serve as a direct on- and off-ramp to the traditional banking and financial system. “Yet, unlike stablecoins, tokenised money market funds are regulated securities, can pay yield directly to shareholders, and are only available to vetted participants that have passed KYC/AML checks,” said Kaul.
Tokenised money market funds also offer investors the usual tokenisation benefits: transparency as to the underlying holdings and daily reporting. These features offer investors superior protection compared to stablecoins, reducing the need for over-collateralisation, making money market funds an obvious starting point for TradFi institutions dipping their toes into tokenisation.
An evolving ecosystem
Financial institutions are increasingly demanding regulated digital asset infrastructure, driving the ecosystem's evolution. In February, authentication and precision logistics tech platform VerifyMe announced a merger[10] with blockchain infrastructure and RWA tokenisation platform Open World, with the combined entity set to be a key infrastructure provider for tokenised digital assets. The partnership will bring the “scale and governance standards required for real-world asset tokenisation to transition from early adoption into mainstream financial markets,” said Matt Shaw, Co-Founder and CEO of Open World.
In the same month, Robinhood launched a public testnet Robinhood Chain[11] , an Ethereum Layer 2 built on Arbitrum with the stated goal of accelerating the development of on-chain financial services. The launch is expected to precede a mainnet launch later in 2026, and in the meantime will enable developers to start building and verifying apps on Robinhood Chain. Steps like these will open up new avenues for developers to build and experiment with assets such as stock tokens in developer-friendly blockchains (in this case, Ethereum) and to direct test these products.
Why it matters: A staged approach towards tokenised TradFi
The potential benefits of tokenisation for traditional financial institutions are clear. Smart contracts have the potential to remove much of the friction from traditional trading approaches. Uniswap, for example, uses them to match buyers and sellers via liquidity pools and automated market makers[12] . Last year, the World Economic Forum (WEF)[13] published a report that listed traditional financial systems among the barriers to more widespread adoption of tokenised assets: for example, what happens in the event of discrepancies between tokenised books and institutions’ traditional books and records?
Addressing these challenges, the report states, requires a staged approach that builds on existing investments to secure transactions between tokenised and TradFi systems. “Financial institutions can incrementally adopt tokenised assets by connecting public programmable ledgers to their existing infrastructure, beginning with non-cash assets and scaling as new forms of on-chain value emerge,” says the report.
This approach – which we are now seeing play out across a wide range of financial institutions – avoids costly infrastructure changes as participants gain confidence and adoption accelerates. “The development of tokenised fund structures is one that we believe can bring huge technological efficiencies to the investment sector, and we expect this to take full effect over the next decade,” said Ripple’s Khakoo.
Crypto ETPs opened a door for financial institutions to explore the adoption of digital assets, and their initial success has doubtless whetted many an appetite. But they remain pegged to a volatile underlying asset, and more widespread adoption will only happen through greater regulatory clarity and the development of an ecosystem and an infrastructure that can bring the benefits of DeFi technology to more stable assets.
At present, we are seeing the foundations of this ecosystem being laid.
[1]https://www.etfstream.com/articles/blackrock-bitcoin-etf-hits-usd10bn-in-record-time
[2]https://www.theblock.co/post/384265/global-crypto-etp-inflows-hit-47-billion-usd-2025-coinshares
[3]https://www.globaldata.com/media/banking/institutional-crypto-adoption-remains-flat-in-2025-but-its-not-necessarily-negative-signal-says-globaldata/
[4]https://www.morganstanley.com/insights/articles/digital-assets-push-into-the-mainstream-as-global-adoption-surges
[5]https://www.schwab.com/learn/story/tokenization-real-world-assets-on-blockchain
[6]https://www.avivainvestors.com/en-gb/about/company-news/2026/02/aviva-investors-seeks-to-tokenise-products-with-ripple/
[7]https://fortune.com/2026/02/11/blackrock-uniswap/
[8]https://tokenterminal.com/resources/newsletter/tokenized-asset-markets-2026-growth-rates-year-end-projections
[9]https://www.franklintempleton.co.uk/articles/2025/disruption/tokenized-money-market-funds-the-bridge-to-a-new-financial-infrastructure
[10]https://www.businesswire.com/news/home/20260212959332/en/Open-World-and-VerifyMe-Sign-Definitive-Merger-Agreement
[11]https://robinhood.com/us/en/newsroom/robinhood-chain-launches-public-testnet/
[12]https://fortune.com/2026/02/11/blackrock-uniswap/
[13]https://reports.weforum.org/docs/WEF_Asset_Tokenization_in_Financial_Markets_2025.pdf
