Since early 2024, the crypto market has grown rapidly, with innovation pushing boundaries. Much of this growth is driven by Wall Street institutions, led by BlackRock, entering the cryptocurrency spot ETF market. Now, their attention is shifting to tokenization. BlackRock CEO Larry Fink described crypto ETFs as “stepping stones” toward broader asset tokenization. Riding this wave, Wall Street is bringing more assets and businesses on-chain, creating opportunities for traditional finance and crypto to merge.
Tokenizing financial assets isn’t new it’s been happening since 2017 but only recently gained traction. Early efforts used permissioned blockchains, but now public chains like Ethereum dominate institutional tokenization. Rather than resisting decentralization, institutions are embracing it to reimagine assets and technology. As Coinbase noted, “Web3” is gradually being replaced by the term “Onchain.”
This time, the focus isn’t just on cryptocurrencies but also on real-world assets like stocks. Coinbase, the largest U.S. cryptocurrency exchange, is a popular target for tokenized stocks. According to rwa.xyz, as of January 2025, tokenized stocks’ market value is about $12.55 million, with nearly half tied to Coinbase. Tokenized shares of U.S. tech giants like Nvidia, Tesla, and Apple are also appearing on-chain.
Coinbase’s plan to tokenize its stock and launch it on Base would let investors trade shares directly on-chain while integrating the trading platform, Base chain, and on-chain ecosystem. This aims to create a U.S.-compliant, scalable model for stock tokenization, keeping Coinbase ahead in crypto-financial innovation. Their broader vision, as Pollak noted, is to bring all assets worldwide to Base. The future likely involves accelerating global asset migration to the blockchain via tokenization.
Despite skepticism, tokenization’s core ideas democratizing investment opportunities and simplifying capital flow are compelling. Stablecoins, BUIDL funds, and other tokenized assets have proven on-chain usability, and more asset classes are moving on-chain: private credit, bonds, gold, real estate, and even carbon credits and rare minerals.
The OKG Research predicts that by 2025, Wall Street will further “go on-chain,” enriching tokenization systems. On-chain assets beyond stablecoins may surpass $30 billion, with more enterprises tokenizing assets. While tokenized assets’ scale might not yet be “huge,” their impact will be significant.
A More Democratic Financial Future
Sixty years ago, buying or using financial securities as collateral meant waiting five days for paper certificates. The growing volume of certificates eventually forced Wall Street to adopt computers for tracking.
Today, leveraging technology for competitive trading advantages is routine. From BlackRock and Goldman Sachs to Citigroup and JPMorgan, Wall Street recognizes tokenization as the future. Unlike past passive digitization efforts, tokenization is a proactive transformation.
Deploying tokenized assets on-chain is no longer difficult. The real challenge lies in creating demand for tokenized assets and solving liquidity issues. Traditional securities thrive due to high liquidity and low transaction costs. If tokenized assets remain locked on-chain or limited to illiquid secondary markets, their value diminishes.
Nadine Chakar, former head of digital assets at State Street Bank, shared this concern: “A bank issues tokenized bonds and announces it. What happens next? Nothing. These bonds don’t circulate.” Solving liquidity issues may vary by institution, but the simplest way is to tokenize high-quality assets quickly. Accumulating quality assets on-chain can attract users and capital, boosting liquidity.
With stronger network effects, tokenization is scaling beyond pilots. McKinsey predicts it won’t happen overnight. Initial waves will involve proven, scalable use cases, followed by smaller, more challenging asset types.
Once early on-chain assets establish compliant, viable business models and generate liquidity, tokenization could create a freer, more democratic “shadow” capital market. By broadening investment opportunities and streamlining financing, tokenization will transform asset supply and demand, bridging off-chain and on-chain worlds to build a truly global financial ecosystem.