JPMorgan Says Tokenization Will Transform Funds Industry, but 'Good Use Cases' Still Years Away

Gate News message, April 26 — Ciarán Fitzpatrick, JPMorgan’s global head of ETF product and securities services, said tokenization will drive change across the entire funds industry, not just ETFs. In a post on Friday (April 25), Fitzpatrick outlined how tokenized ETFs could offer enhanced creation and redemption processes, near-instant settlement, and nonstop access.

“My view on tokenization is that it will become part of the ETF ecosystem, but we’re a couple of years away from some good use cases,” Fitzpatrick said. JPMorgan is already exploring different tokenization use cases through Kinexys, the bank’s blockchain business unit.

Regulators and traditional financial institutions have recently shown increased willingness to tokenize established investments, particularly those that trade on exchanges closed during weekends, such as equities and funds. SEC Commissioner Hester Peirce has encouraged firms exploring tokenized products to engage directly with the agency. The SEC has already approved multiple tokenization initiatives, including enabling Nasdaq to support tokenized share trading. The New York Stock Exchange, Robinhood, and several major crypto exchanges are all seeking to scale tokenized equities offerings.

Analysts expect tokenized assets to reach trillions of dollars over the next decade, with projections ranging from approximately $2 trillion to over $10 trillion by 2030.

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Analysts expect tokenized assets to reach a scale of trillions of dollars in the next decade, with a forecast range of approximately $2 trillion dollars to over $10 trillion dollars by 2030.
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