Tokenization is the process of issuing a blockchain-based token that represents a claim on a real-world asset — a government bond, a property, a private credit instrument, or a commodity. The token itself is not the asset; it is a digital record of ownership or entitlement, enforced by code rather than by a custodian's ledger.
The potential significance of this shift is in settlement. Traditional financial markets operate on settlement cycles of one to two business days, require multiple intermediaries, and are generally inaccessible outside banking hours. A tokenized asset can settle in seconds, at any time, with fewer counterparties involved.
Major financial institutions — BlackRock, Franklin Templeton, JPMorgan — have moved beyond experimentation and are actively issuing tokenized money market funds and treasury products. The total value of tokenized assets on public blockchains crossed $10 billion in 2024.
The open question is not whether tokenization is technically feasible — it clearly is — but which assets benefit most from this infrastructure, and which regulatory frameworks will govern them. That question is being answered jurisdiction by jurisdiction, market by market.