Three years ago, BlackRock’s Larry Fink predicted that the “next generation for markets … will be [the] tokenisation of securities.” What was a bold statement on the future of finance is today a commercial reality, with the industry rapidly approaching an inflection point.
In June 2025, tokenised assets under management (AUM) reached over $24bn – an 85% increase in just six months. Early launches from industry leaders, including BlackRock, Fidelity Investments, and Apollo, are proving the model works. It’s no surprise that 77% of asset managers in our recent survey on tokenised distribution said tokenisation is a “key trend that justifies immediate action”.
A powerful convergence is underway. Asset managers are turning to tokenised distribution as their fastest route into digital assets, while a maturing decentralised finance (DeFi) ecosystem is seeking blockchain-native solutions for effective treasury management. Tokenisation has become the essential bridge between traditional finance (TradFi) and DeFi, connecting two worlds that, until now, have largely operated apart.
Why distribution comes first
The long-term vision for tokenisation involves digitalising the entire asset management value chain, but the immediate, practical entry point is distribution. Asset managers’ most direct path is to take existing funds and issue them in token form.
This approach, where only the fund unit is tokenised, leaving the underlying fund structure, administration, and servicing unchanged, gives asset managers access to new markets and investors without the cost and complexity of overhauling major infrastructure.
It’s hard to overestimate the scale of this opportunity. Calastone’s research forecasts that tokenised fund AUM is set to grow from $4bn in 2024 to $235bn by 2029 – a 58-fold increase. Solutions like Calastone’s Tokenised Distribution are enabling this boom, leveraging the world’s largest funds network to help managers bring existing funds on-chain.
How DeFi demand is driving supply
This isn’t supply-led innovation; it is a direct response to demand from the DeFi ecosystem. As DeFi platforms like stablecoin issuers have matured, so have their balance sheets. Tether, the largest stablecoin issuer, now holds $127bn in US Treasury bills, making it a larger buyer than Canada, Taiwan, Mexico, Norway and Hong Kong.
However, these digital-native organisations face a challenge: a lack of blockchain-compatible tools for treasury management. Our research found that 75% of DeFi platforms currently hold their cash in traditional money market funds (MMFs) or bank deposits. The very platforms that helped pioneer a decentralised financial model are forced to resort to traditional intermediaries to manage their own assets, undermining liquidity, transparency and speed of settlement.
Tokenised MMFs are an obvious entry point, combining the safety, liquidity, and yield of traditional finance with blockchain-native benefits like on-chain settlement, direct digital wallet integration, and stablecoin compatibility. They provide the security of the old world with the flexibility of the new.
It shows in our research. The vast majority (80%) of DeFi platforms believe tokenised MMFs could benefit their treasury management – not just as a tool to manage assets more effectively but also to retain clients (75%) and attract new investors (40%).
This aligns neatly with asset managers’ own priorities: MMFs and private asset funds are the top products they want to tokenise.
Partnerships, speed, and flexibility
As tokenisation has rapidly moved from concept to reality, asset managers are prioritising speed to market, choosing collaboration over building capabilities in-house.
Our research shows a clear preference for working with third parties. For instance, 70% of managers view technology partners as a “Day 1” priority, and plan to use intermediaries like digital fund distribution platforms (36%) or digital exchanges (34%) rather than going direct to investors.
This flexibility and prioritisation of speed to market extends to payment rails: the vast majority of asset managers plan to accept multiple options, including commercial and non-bank stablecoins, fiat cash, and cryptocurrencies, lowering the barrier to entry for different types of investor.
From gateway to growth
Of course, barriers remain. Regulatory concerns, uncertainty about the legal recognition of digital assets, and the lack of a compelling business case or ROI all weigh heavily, with 85% of managers in a Calastone survey citing these blocking or limiting factors.
Yet the momentum is on tokenisation’s side. Early successes and the rapid pace of inflows to tokenised funds is already proving the business case in real time. Moreover, 65% of managers who have already launched a tokenised fund report benefits over traditional models, citing improved automation and the ability to reach new customers.
Meanwhile, regulation is evolving to support this new model. In the UK, for example, new legislation expected to take effect in 2026 will place fiat-backed stablecoins under the regulatory oversight of the Financial Conduct Authority (FCA). Similar regulatory progress is being made globally, with jurisdictions such as the US increasingly taking the lead in providing clearer frameworks for tokenised assets and stablecoins.
With tokenised distribution there is an immediate opportunity for asset managers to tap into new markets and win new customers now, without disruptive operational upheaval. It creates a symbiotic relationship: asset managers gain a new acquisition channel, while DeFi platforms gain the sophisticated on-chain financial tools they need to mature.
Over time, this model has the potential to reshape how funds are accessed and allocated. As regulatory frameworks and market infrastructure continue to mature globally, tokenised distribution offers a scalable path into decentralised markets – one that preserves the governance, controls and operational discipline asset managers require.
