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The Tokenization Race Is Moving Beyond Crypto: Here’s Why

Tokenized Finance Network-

As traditional financial institutions show greater interest in blockchain, the race to tokenize financial assets is moving beyond cryptocurrency companies. Banks, asset managers, and stock exchanges are exploring ways to issue securities, manage investments, and settle transactions using blockchain-based systems.

In the United States, the Securities and Exchange Commission (SEC) is considering how certain tokenized securities could operate within existing securities regulations. In Europe, regulators are exploring ways to build a more integrated capital market, including through tokenized assets. These efforts share a broader goal: bringing blockchain infrastructure into traditional finance without removing the regulatory protections that govern existing financial products.

SEC Moves Forward With Securities Market Reforms

The SEC is examining how tokenized securities could fit within existing market rules. These products use blockchain technology to record ownership and facilitate transfers, but their legal status and trading arrangements depend on how they are structured.

The Commission has also proposed changes to the cross-trading provision of the Investment Company Act. The provision allows registered investment funds and their affiliates to conduct certain securities transactions under specific conditions. The proposed changes would broaden the scope of permitted cross-trades while adding investor protections. According to the SEC, the changes could help registered funds reduce trading costs and improve transaction efficiency.

Separately, the SEC released a Section 21(a) report ahead of the 2027 proxy season. The report addresses asset managers’ and asset owners’ responsibilities when engaging with shareholders through coordinated initiatives.

The Commission discussed the activities and disclosure requirements associated with Climate Action 100+ and other organized initiatives. Investors holding more than 5% of a company’s shares may face additional conditions when their activities involve seeking to influence or control the company. This report concerns shareholder engagement rather than tokenized securities directly, but it illustrates how the SEC’s broader regulatory work continues to shape the responsibilities of institutional investors.

Europe Explores an Integrated Tokenized Capital Market

European authorities are studying how blockchain technology could support a more integrated market for traditional financial assets. Tokenization could affect how securities are issued, traded, and settled on regulated platforms, although broader adoption will depend on regulatory coordination and market infrastructure.

The EU’s DLT Pilot Regime, supervised by the European Securities and Markets Authority (ESMA), allows eligible firms to test trading and settlement systems based on distributed ledger technology under a controlled regulatory framework. The regime provides a way to explore potential efficiencies while maintaining oversight.

Separately, the Markets in Crypto-Assets Regulation (MiCA) imposes obligations on certain crypto-asset service providers and stablecoin issuers. ESMA has also instructed authorized providers to stop offering services involving stablecoins that do not comply with MiCA requirements. These rules address different parts of the digital asset market: the DLT Pilot Regime focuses on market infrastructure for financial instruments, while MiCA governs specified crypto-asset activities.

Together, these measures show how European regulators are approaching both tokenized traditional securities and crypto-asset services. An integrated tokenized capital market, however, would require regulators, exchanges, custodians, and settlement providers to coordinate their systems and operating rules.

Wall Street Expands Its Interest in Tokenized Financial Assets

Large financial institutions are exploring ways to bring traditional assets onto blockchain-based platforms. The potential market includes tokenized stocks, bonds, investment funds, and other financial products, although these categories differ in their legal structures and levels of adoption.

According to a report shared by Crypto Saving Expert, Morgan Stanley has estimated that the tokenized asset market could reach $10 trillion by 2030. This is a forecast, not a confirmed outcome, and its implications depend on which asset classes are included and how quickly institutions adopt tokenized products.

Meanwhile, estimates cited in market commentary put the value of tokenized real-world assets above $120 billion in 2026, compared with approximately $50 billion previously. The comparison suggests growth, but the figures should be interpreted in light of the measurement dates and the categories of assets included. Nasdaq, the New York Stock Exchange, and Morgan Stanley have also been associated with initiatives involving tokenized securities or related market infrastructure.

Financial institutions are examining how blockchain systems could improve securities issuance, investment distribution, and settlement. However, announced initiatives do not guarantee commercial adoption. Their long-term prospects will depend on regulatory approval, technical integration, investor demand, and whether the products offer practical advantages over existing systems.

Traditional Finance Could Lead the Next Tokenization Phase

The next phase of tokenization could involve major banks, investment managers, and stock exchanges as well as cryptocurrency companies. Traditional financial institutions already operate within regulated markets and maintain relationships with investors, which may help them distribute tokenized products if the necessary infrastructure and rules are in place.

As more assets move onto blockchain networks, institutions may need systems that connect different platforms. Cross-chain infrastructure providers such as Wanchain are developing technology designed to move digital assets between separate blockchain networks. Such infrastructure could help address interoperability challenges, although its role in any specific institutional project would need to be established separately.

No commercial partnership between Morgan Stanley and Wanchain has been confirmed. Interest in blockchain connectivity does not establish that a particular provider will secure institutional customers or become part of a major financial institution’s infrastructure.

Other announcements point to efforts to connect established financial firms with blockchain businesses. Franklin Templeton and Animoca Brands have announced plans to expand institutional access to tokenized investments through the NUVA marketplace. The commercial significance of that initiative will depend on its implementation, the products made available, and whether institutions ultimately use the platform at scale.

Tokenization is therefore moving beyond crypto-native companies, but its next stage is not guaranteed. Regulatory clarity, interoperability, investor protections, and real demand will help determine whether these projects become part of mainstream financial infrastructure or remain limited experiments.