A generational shift is underway in asset management, one that promises to redefine how investment funds are accessed, distributed, and held. With over $68 trillion in wealth expected to transfer between generations in the coming years, asset managers face both a profound challenge and a compelling opportunity. At the same time, the growth of tokenised mutual funds is accelerating, with forecasts suggesting the market could reach $600 billion by 2030.
These aren’t abstract projections. Tokenised treasury markets alone surpassed $4 billion in assets under management by the end of 2024, and had already reached $5 billion by the end of Q1 2025, far exceeding expectations and providing a clear indication of how quickly blockchain-based investment models are gaining traction. The battleground for asset managers is no longer limited to product design or portfolio performance — it’s now also about how those products are distributed. And blockchain is increasingly setting the rules for this new playing field.
Distribution is Broken
Despite technological progress in many areas of finance, fund distribution remains largely mired in legacy processes. Traditional systems are often siloed, expensive, and ill-equipped to meet the expectations of a digital-first world. For asset managers, this translates into limited reach and rising operational costs at a time when pressure to drive inflows and expand investor access is intensifying.
But the challenge isn’t just internal. Today’s investors, particularly digital natives, want more than access. They expect control, immediacy, and seamless user experiences. They are used to operating in environments where they can manage their portfolios, execute trades, and track performance with a few clicks. They want to hold all of their assets natively in one place, not aggregated through slow, fragmented systems. They demand near-instant execution, real-time settlement, and full transparency, expectations shaped by their experiences across other sectors, from e-commerce to digital banking.
Unfortunately, traditional distribution infrastructure often falls short. The onboarding process can be sluggish, pricing updates delayed, and data reconciliation cumbersome. Worse still, early experiments with tokenised distribution have sometimes come at a significant premium — two to three times more expensive than traditional channels — undermining their potential to scale. As a result, many high-value investors have been left underserved or have chosen to remain outside the traditional ecosystem altogether.
Who’s Coming On-Chain
A new class of investors is now emerging, bringing with them both liquidity and the demand for change. Digital treasurers at fintech and Web3 firms, along with blockchain foundations, are managing substantial reserves and actively seeking investment options that align with their operational models. Stablecoin issuers, who collectively manage billions in reserve assets, are exploring ways to earn yield by investing into on-chain money market funds.
At the same time, a growing cohort of crypto-native retail investors is looking to gain exposure to traditional asset classes, but through the infrastructure and interfaces they already use. Traditional institutions are also moving into this space, with asset managers launching crypto-linked ETFs and beginning to manage tokenised portfolios entirely on-chain.
These developments point to a broader transformation. Entire ecosystems of on-chain participants are emerging, each demanding infrastructure that supports native blockchain distribution at scale. They want seamless integration, institutional-grade security, and the ability to manage investments on the same platforms where they transact, borrow, and store value.
Tokenised Distribution via Blockchain
Tokenised distribution offers a compelling solution, one that makes it possible to transform traditional investment funds into blockchain-native assets, while retaining all the existing operational structure behind them. With solutions such as Calastone Tokenised Distribution, asset managers can take any traditional fund share class and issue it in tokenised form on public or private blockchains. These tokenised representations are enriched with the necessary fund and distribution details, and can be traded and settled via smart contracts, all without requiring any changes to the asset manager’s existing systems or relationships with service providers.
Orders are initiated directly on-chain via smart contracts, then routed through Calastone’s network, which seamlessly translates them into the formats already used by fund administrators. Tokens are minted when subscriptions are confirmed and released to digital wallets once settlement occurs. Built-in whitelisting ensures that only authorised participants can interact with each tokenised fund. It’s a model that brings blockchain benefits – automation, security, speed – while keeping operational disruption to a minimum.
Importantly, this approach does not require asset managers to re-platform. Instead, it offers a low-friction path to innovation by overlaying a blockchain-based distribution model onto their current operations.
Why This Matters
The benefits of tokenised distribution are significant and far-reaching. Asset managers gain access to entirely new distribution channels, engaging directly with blockchain-native investors who were previously out of reach. At the same time, they can reduce operational costs by streamlining processes and eliminating layers of manual work and intermediaries.
Smart contracts automate many aspects of order processing and settlement, boosting overall efficiency and enabling transactions to occur in real time. The infrastructure is inherently scalable, allowing managers to onboard blockchain-based distributors just as easily as any traditional client. And because the model works with existing systems, it futureproofs the asset manager’s technology stack, opening the door to broader participation in the tokenised finance ecosystem without the need for complex migrations.
Tokenised distribution isn’t simply an enhancement. It’s a structural shift that empowers asset managers to meet the expectations of tomorrow’s investors, securely, seamlessly, and cost-effectively.
Outlook
The projected $600 billion in tokenised mutual funds by 2030 marks the early stages of a much broader transformation. As fund distribution moves on-chain, it’s likely that other areas of asset management, from custody and accounting to investor servicing, will follow, bringing with them greater efficiency and transparency.
Public blockchains have already demonstrated their ability to support tokenised assets at scale, especially in the treasury market. With the infrastructure now in place to support secure, compliant distribution of traditional funds on-chain, asset managers have a clear path to evolve how they connect with tomorrow’s investors and prepare for a more digital, decentralised future.
Distribution is just the tip of the iceberg.
