Welcome to the twelfth letter from TheIntersection team.
Our aim is simple: to decode and deconstruct the world of real-world asset tokenisation, stablecoins and DeFi for mainstream professional investors.
In this issue:
- News: CoinShares debuts on NASDAQ, & L&G gets together with Calastone
- Data: A majority of UK investors already invest in digital assets, says fund manager
- Analysis: TradFi partnerships
- More analysis: Fed gives Kraken a seat at the table
- Our weekly events round-up
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CoinShares debuts on Nasdaq in $1.2bn listing push
European digital asset manager CoinShares has begun trading on CoinShares PLC (CSHR), marking a significant step in its expansion into U.S. capital markets. The listing, completed via a $1.2bn SPAC merger with Vine Hill Capital, opens the door to a much deeper pool of institutional capital. CoinShares manages more than $6bn in digital asset products and sits among the larger crypto-focused asset managers, alongside firms like BlackRock and Fidelity Investments. The company says the U.S. listing will support its next phase of growth, including new products and broader institutional visibility. Why it matters: Crypto-native firms are increasingly entering traditional equity markets — another sign that digital asset managers are becoming part of the mainstream financial infrastructure.
layer of collateral inNews in Brief
RWA market approaches $28bn amid steady inflows
The tokenised real-world asset market is now sitting in the ~$27–30bn range, growing steadily despite broader crypto volatility. Demand continues to centre on yield-bearing assets. Why it matters: RWAs are starting to act as a “flight to quality” within crypto markets.
Tokenised Treasuries lead — and outpace stablecoins
Tokenised U.S. Treasuries now account for more than $10–12bn on-chain and are growing faster than stablecoins, as capital shifts into yield-generating instruments.
Why it matters: Treasuries are becoming the core layer of collateral in on-chain finance.
IMF frames tokenisation as a structural shift
The International Monetary Fund has described tokenisation as a “fundamental reconfiguration” of financial markets, while also warning of new systemic risks as adoption scales. Why it matters: Policymakers now see tokenisation as core infrastructure — not a niche crypto trend.
Deep Dive — Tokenised fund distribution goes live at scale with L&G and Calastone
The Top Line
Legal & General’s latest move suggests the real breakthrough in tokenisation isn’t issuing assets — it’s how they’re distributed.
The Details
Legal & General Asset Management has made its £50bn liquidity fund range available in tokenised form through the Calastone Tokenised Distribution Network. At first glance, it looks like another pilot. It isn’t.
This is live infrastructure — connecting traditional funds to blockchain-based distribution rails. What’s changed is where tokenisation sits in the stack. Instead of rebuilding the fund itself, L&G is tokenising how it’s accessed, transferred and settled. Calastone handles token creation, order routing and reconciliation, all while plugging into existing fund admin systems. The result:
- No disruption to existing investors
- No need to redesign the underlying product
- Just a more efficient distribution layer on top
Investors can now access tokenised liquidity funds — in USD, EUR and GBP — with same-day settlement and near-instant transferability, all within a regulated framework. That matters because liquidity funds are already a core institutional product: low risk, yield-bearing and operationally simple. They’re a natural place for tokenisation to take hold. The system is also deliberately permissioned. Only approved participants can hold and transfer tokens, ensuring compliance while improving efficiency. And importantly, it’s built to scale. These tokenised units are launching on Ethereum-compatible rails, with more networks expected over time.
57% of UK Respondents Invest in Digital Assets as HMRC Restricts Tax-Free Access
CoinShares recently published findings from a survey of over 2,000 UK retail investors conducted in partnership with Finfluencer, the UK’s leading financial influencer agency. The survey, conducted in March 2026, revealed that the vast majority of respondents actively invest in digital assets. The findings arrived one week before HMRC’s reclassification of crypto ETNs takes effect on 6 April, which will remove these products from Stocks & Shares ISAs and restrict them to Innovative Finance ISAs, a wrapper that no mainstream UK platform currently supports. Amongst the key findings of the survey:
1. Significant digital asset participation. Just over 57% of respondents said they invest in digital assets, split across three access channels: 38% via crypto exchanges or wallets, 10% via exchange-traded notes (ETNs) on regulated exchanges and 5% via traditional brokers.
2. More investors support ISA eligibility than oppose it. When asked whether crypto ETNs should be eligible for purchase within an ISA, only 36% of respondents said No, 43% answered Yes, and the remaining 20% said they weren’t sure, indicating a growing appetite for tax-efficient access to digital assets in the UK.When asked whether crypto ETNs should be eligible for purchase within an ISA, only 36% of respondents said No, 43% answered Yes, and the remaining 20% said they weren’t sure, indicating a growing appetite for tax-efficient access to digital assets in the UK.
3. Appetite extends beyond Bitcoin and Ethereum. Asked whether they would be interested in accessing a wider range of digital assets through ETNs on a regulated UK exchange, 25% of respondents expressed interest (32% said no, and 43% were undecided), showing that the majority of the demand sits in the two largest digital assets (bitcoin & ethereum). However, a quarter of respondents showing interest in additional exposures demonstrates there is some meaningful demand for broader regulated access beyond the two assets currently available via UK-listed ETNs (bitcoin & ethereum).
Regulatory Context
In October 2025, the FCA lifted its four-year ban on retail access to crypto ETNs, allowing UK investors to purchase physically backed Bitcoin and Ethereum ETNs on recognised investment exchanges, including the London Stock Exchange. At launch, these products were eligible for inclusion in Stocks & Shares ISAs. However, HMRC subsequently confirmed that from 6 April 2026, crypto ETNs will be reclassified as qualifying instruments for Innovative Finance ISAs (IFISAs) only. None of the approximately 57 platforms authorised to offer IFISAs has announced plans to support crypto ETNs. In practice, this removes the tax-free wrapper for new crypto ETN purchases by UK retail investors. HMRC has indicated it will keep the inclusion of crypto ETNs in tax-advantaged accounts under review.
According to Jean-Marie Mognetti, CEO and Co-Founder of CoinShares, "This data tells a clear story: UK investors are actively participating in digital asset markets, and a significant proportion want to do so through regulated products within tax-efficient wrappers. With more respondents supporting ISA eligibility than opposing it, the case for keeping this avenue open is backed by evidence, not speculation. We welcome HMRC’s commitment to keeping the policy under review and believe these findings should inform that process.”
Survey Methodology
The Finfluencer–CoinShares Crypto Survey was conducted in March 2026 via Finfluencer’s UK investor community. The survey received between 1,965 and 2,232 responses across three questions (respondent counts varied by question). The survey audience consists of engaged retail investors who follow personal finance content. Results may not be representative of the UK population as a whole.
TradFi partnerships and the foundation of a tokenised fund ecosystem
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
Fed gives Kraken a seat at the table
by Damien Black
The Federal Reserve has thrown open its doors to Kraken, granting the cryptocurrency platform direct access to the US banking payments system. This will streamline crypto-fiat transactions by eliminating the need for third-party middlemen and likely accelerate the merger between TradFi and DeFi.
In Marchannounced. This was a first of its kind – other crypto concerns had tried for years to secure the privilege but failed.
Kraken Financial said it would begin with a “phased rollout”, reported elsewhere as spanning an approved one-year trial period. A master account with the Fed allows an institution to access its payment systems – it’s considered essential to operating a national bank in the US. It does come with limitations – for instance, Kraken Financial will not be able to issue interest payments on reserves. However, the move was enough to provoke a furore among actors in the TradFi banking sector. Denouncing it, the Independent Community Bankers of America warned: “There are significant risks to expanding direct Fed account access to institutions that operate outside the traditional banking regulatory framework.”
It added: “The Fed should continue limiting master account access to institutions that meet the financial services sector’s highest standards.” This highlights the inherent distrust that many in conventional banking still feel towards cryptocurrency entities, and the resulting fear of the continuing crypto-colonisation of the financial sector.
Nothing to worry about?
Naturally, Kansas City Fed was quick to allay such concerns, insisting “the integrity and stability of the US payments system remain our priority”. It added: “The payments landscape is actively evolving.” Likewise, Kraken stressed that the triumph was a reward for “years of sustained regulatory engagement, operational rigour, and close coordination with US and Wyoming supervisors.”
Its co-CEO Arjun Sethi said: “This milestone marks the convergence of crypto infrastructure and sovereign financial rails. With a Federal Reserve master account, we can operate not as a peripheral participant in the US banking system, but as a directly connected financial institution.” Kraken believes that Fed access will pave the way for streamlined crypto-fiat transactions and “programmable financial products built within a fully regulated framework”. It will also mean lower costs for its users. The master account means that Kraken can essentially plug itself into the Federal Reserve’s national payments system including Fedwire, which processes an estimated average $4 trillion in transfers daily, without relying on third-party banking intermediaries.
“This direct connectivity enables faster and more efficient fiat movement for institutional clients, while reducing complexity, cost, and operational dependencies,” said Kraken. To be fair, Kraken had to jump through a few hoops to get here. It took five years of negotiation to secure the account. As a state-chartered entity, Kraken Financial operates on a “full-reserve basis” and holds liquid assets that are at least equal to the total of client fiat deposits.
Old name in a new game
Kraken is one of the oldest players in a new industry. Founded in 2011, its platform is powered by Payward and allows clients to trade more than 600 digital assets. What’s more, they can also use it for TradFi assets such as US stocks, futures and ETFs, not to mention major fiat currencies including sterling, dollars and euros. In case you hadn’t gathered, the merger of TradFi and DeFi is already well under way. Kraken’s Fed deal is just another milestone along the road towards… who can say exactly? One thing is for sure. The naysayers are convinced that place is nowhere good.
The Bank Policy Institute (BPI), which represents Wall Street big guns like Goldman Sachs, JPMorgan Chase, and Bank of America, argued that the Kansas Fed's move violates the Federal Reserve’s own policies. “This action ignores public comment that the Federal Reserve sought on this framework, and it was issued with no transparency into the process for approval or the risk mitigants that have been imposed to address the very significant risks it raises,” said the BPI shortly after the account was granted.
Fears have also been expressed that giving crypto companies access to Fedwire, which underpins the global dollar clearing system, could be a bonanza for money launderers and siphon liquidity from the TradFi banking network. Kraken’s response to that, reported by Reuters in April, is that its reserves are fully backed and that it is as AML-compliant as any bank.
A slow-flying pilot?
The backdrop to this is a snarl-up in Congress, with TradFi and DeFi operators at loggerheads over a long-anticipated bill intended to make provisions for cryptocurrency. The Digital Asset Market Clarity Act of 2025 faces considerable opposition from TradFi banking lobbies, who argue that allowing crypto firms to pay interest-like payments or yields on stablecoins would run the risk of “deposit flight” – in other words, punters taking money out of conventional bank accounts and putting them into crypto instead. This perhaps explains the Fed’s “go-slowly” approach in granting a limited account to Kraken Financial.
Finance and tech pundits took to social media to throw in their ten digi-cents’ worth following the announcement. Perhaps most telling is a comment on LinkedIn by Fintech Brainfood founder Simon Taylor. He posted: “This isn’t the same as what most big banks have. It’s a ‘skinny master account’.” This refers to limitations imposed by the Fed that preclude Kraken from lending or taking deposits. A coincidence? It’s hard to ignore given the fuss being kicked up on Capitol Hill over the terms and provisions of the Clarity Act. “It’s the payments plumbing without the balance sheet risk,” said Taylor of the Kraken Fed account deal. “The Fed is treating Kraken as a pilot.”
Kraken IPO delayed
Caution seems to be contagious. Not long after news of the Fed skinny account was made public, Kraken also declared that its long-awaited IPO was being put on ice. On March 18, CoinDesk cited sources at Kraken as saying its multibillion-dollar public offering was being put on hold due to tough market conditions. Crypto has taken something of a battering since Bitcoin slid off its peak in October 2025, damaging investor confidence. Kraken’s IPO valuation has also taken a pounding. Valued at $20 billion in November, Kraken shares were reported by PM Insights at the end of March to be trading at a discount of just over 33%.
Watch what they don’t say
Meanwhile, the pushback on Capitol Hill continues. As at the time of writing, Kansas City Fed faces an April 17 deadline to provide Democrat lawmaker Maxine Waters information allaying fears raised that its decision violates Federal Reserve policies.[1] While Kraken cannot use the Fed account to access lending or earn interest on reserve holdings, it declined to clarify whether or not it will be given access to Fed credit. And here we have the devil in the detail.
This curious refusal to comment throws up a potential contradiction – on the one hand, the terms of the Kansas deal explicitly state that Kraken cannot access the Federal Reserve’s capacious lending capacity. In theory, this should mean no money for bailouts if things go wrong. So why the awkward silence?
It could mean that the deal allows Kraken Financial to access intraday credit – essentially, this is intended as a kind of ‘overdraft’ facility, a short-term loan used by banks to keep payments fluid if their account balance temporarily dips during a given day. Kraken could therefore process massive transfers even if it didn’t have the requisite cash reserves at the time, although under intraday arrangements it would be obligated to settle up by the close of business. If this is the case, it’s potentially huge. The pilot is just that – a ‘see-how-it-goes’ arrangement that could pave the way for something more far-reaching down the line. Perhaps the naysayers are right to be concerned.
Events on our radar
DigiAssets Connect Zurich, 16-17 June - Custody, banking, and institutional infrastructure – tickets HERE
