Some of the US's largest assets managers have highlighted that tokenization is moving beyond experimentation and into practical financial infrastructure, as financial firms look to bring traditional funds and cash products onchain.
Tokenization Grows as Wall Street’s Digital Backbone, Asset Managers Say
4 February 2026 - 22:53 CET
By Ana Pereira
Speaking at the Ondo Summit on Feb 2, executives from Franklin Templeton, Fidelity, WisdomTree and State Street said the next phase of adoption will be driven by collateral efficiency, round-the-clock markets and balance-sheet management rather than retail demand for tokenized versions of existing products. Together they oversee more than $12 trillion in mainly traditional assets.
“The idea of bringing an asset onchain with a token is the easiest part,” said Cynthia Lo Bessette, head of Fidelity's digital asset management unit. “The hardest part is building the ecosystem for utility, 24/7 access, global access and the ability to manage collateral in real time.”
Franklin Templeton: beyond stablecoins
Franklin Templeton's representative said demand is beginning to broaden beyond stablecoins into what it described as a more interoperable onchain liquidity layer.
“We’re realizing there’s no one model yet,” said Sandy Kaul, head of innovation at Franklin Templeton. “You need to be experimenting with all pathways simultaneously because we don't know what's going to really get traction in the long run.”
Kaul added that much of the current demand is coming from crypto-native users rather than traditional brokerage clients, with demand for digital assets still “flying under the radar” of the traditional financial industry.
Tokenized money market funds gain traction
Panelists pointed to tokenized money market funds as one of the clearest early use cases, with assets growing from roughly $3bn to about $10bn over the past year.
Kim Hochfeldt, who leads digital asset initiatives at State Street's investment management unit, said tokenization could materially improve how collateral functions during periods of market stress.
Hochfeldt argued that tokenized money fund units used as collateral could eliminate forced asset sales and prevent systemic dislocation. From regulators to money managers to end users it’s a solution that “suits" everyone, she said.
WisdomTree's head of digital assets Will Peck noted that tokenization is not aimed at replacing ETFs or brokerage accounts but at serving new financial workflows that existing infrastructure cannot support.
No longer a niche
Looking ahead, panelists said regulatory coordination and education remain key constraints to scaling tokenized finance. Still, they argued that tokenization is increasingly being treated as a core infrastructure upgrade rather than a niche crypto initiative.
