2025 might have been a lackluster year for crypto prices, but it was a transformative one for the industry's institutional adoption. Traditional financial (TradFi) institutions made their truly meaningful entry into crypto, which has been driven largely by tokenization.

Tokenization, the process of putting real-world assets (RWA) like bonds, stocks, commodities, art, and real estate on-chain, has actually been the single-most prevalent and adopted narrative of this year.

Data shows that the value of total RWA tokenization surged more than 3x this year to surpass $18.7 billion and is projected to reach trillions of dollars within the next decade. Meanwhile, the total stablecoin value has hit the $300 billion mark.

This massive growth is driven by tokenization's ability to enable fractional ownership, increase liquidity, reduce cost and barriers to entry, and enhance transparency and efficiency.

Wall Street Bets on Tokenization

Today, major financial players such as Fidelity, Franklin Templeton, State Street, UBS, Goldman Sachs, BNY Mellon, HSBC, and Citi are actively exploring tokenization for bonds, securities, and private markets.

BlackRock operates the largest tokenized money-market fund (BUIDL), with $2 billion in assets under management.

Tokenized money funds (MMF) are actually leading the tokenization trend, which fintech strategist and digital-asset infrastructure expert Wojciech Kaszycki says, “signals a paradigm shift in institutional finance.”

“For the first time, treasury, collateral, and settlement assets can be managed in a fully digital, programmable environment, operating 24/7 across chains. This is not just about efficiency, it's about creating compliant, yield-driven infrastructure that transforms how capital is deployed, and risk is managed in real time,” he added.

Just this week, the $4 trillion asset management arm of JPMorgan Chase, which has Bitcoin’s loudest critic at the helm, also launched its very first tokenized MMF on Ethereum. It's a new private fund, My OnChain Net Yield Fund (MONY), which holds baskets of short-term debt securities and is supported by Kinexys Digital Assets, the bank’s tokenization platform.

Qualified investors subscribe to the fund using cash or USDC stablecoin and receive tokens that represent their holdings in a digital wallet.

The development is the result of a “massive amount of interest from clients around tokenization,” with JPMorgan Asset Management hoping “to be a leader in this space.”

Tokenization Becomes Core Infrastructure

The rapid institutional adoption of RWA tokenization is the prevailing trend in the market, with institutions moving from experimental pilot programs to more established solutions. The focus of financial institutions is on high-quality liquid assets like tokenized U.S. Treasuries and highly liquid, short-term debt securities due to their stability and clear efficiency gains over traditional systems.

Not just institutions but even national programs are exploring tokenization, which validates the macro adoption of blockchain-based tokens.

“Tokenization is no longer an experiment,” noted Xin Yan, Co-founder and CEO of Sign, a Sequoia, Circle, and YZi Labs-backed project developing a national-scale blockchain infrastructure currently being implemented in government projects across Thailand, Sierra Leone, Kyrgyzstan, and the UAE.

He continued, “It is one of the most transformative advancements in digital finance that is fast becoming the foundation of real-time, programmable liquidity, and something we’ve been discussing since 2022. As society accelerates from information, logistics, and financial markets, asset circulation will keep pace with development, with tokenization serving as the key mechanism to support this shift.”

“Tokenization enables the unification of payments, identity, and data integrity in ways legacy systems could never achieve. Soon, institutions will operate on a fully digital cash rail, moving value instantly and with certainty.”

Crypto exchanges, meanwhile, are busy tokenizing stocks and other securities. In Q3 of 2025, amidst the market lull, the XRP Ledger (XRPL) was able to hit its all-time high RWA market capitalization of $364.2 million.

Regulatory Clarity Enables Institutional Scale

Besides institutional issuance going mainstream, another trend defining tokenization is regulatory clarity.

In the US, the passage of the GENIUS Act has established a federal framework for dollar-denominated stablecoins. Developments are also ongoing around the Clarity Act, which is aiming for a more constructive approach to create a clear regulatory framework for crypto markets, ending any uncertainty while providing strong safeguards.

CFTC Acting Chair Caroline Pham, meanwhile, has launched an initiative to advance the adoption of tokenized MMFs as eligible collateral, which is recommended by the CFTC Global Markets Advisory Committee.

In the European Union (EU), the Markets in Crypto-Assets (MiCA) regulation has established uniform market rules for cryptocurrencies.

These regulatory efforts are providing TradFi firms with the necessary confidence to engage with crypto, scale their implementation, and expand tokenization initiatives across assets.

All of this shows that this year, tokenization has entered a new phase. It is now being seen as the finance sector’s equivalent of the internet revolution.

The Next Frontier of Tokenized Markets

Moving forward, regulatory validation and institutional adoption will continue to shape tokenization, helping it become the standard financial infrastructure and unlock billions of dollars.

And as tokenized assets start competing directly with traditional market rails, growth may move from primary issuance to secondary trading liquidity. It’s also a possibility that we move deeper into stock, even revenue-sharing tokens, and other RWAs like oil.

As Baron Lamarre, former Head of Trading at Petronas and Co-Founder of Index, noted, “By creating a compliant digital settlement layer, we can move crude, refined products, and derivatives seamlessly while increasing transparency and liquidity, allowing the centuries-old market to operate with the speed, reliability, and accountability that traditional methods could never deliver.”

Index is a regulated centralized exchange built for Crude Oil, using tokenization to modernize how energy assets move and settle, addressing the market’s growing transparency and liquidity challenges.

Besides expanding the asset classes, broader adoption of tokenized collateral across markets is also expected going forward.

Technologically, interoperability should be expected to replace single-chain programs to prevent liquidity fragmentation, along with a focus on compliance, growing usage of public settlement layers, and development of privacy-preserving tech.

With that, what started as an experiment will become a functional part of institutional infrastructure, led by banks and asset managers building the foundation for a future in which all financial assets may eventually exist as digital tokens on blockchains. This marks the evolution of crypto into a core element of modern financial markets.