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

Gate News message, April 25 — JPMorgan’s global head of ETF product, Ciarán Fitzpatrick, said tokenization will drive significant change across the entire funds industry, not just ETFs. “We believe tokenization will certainly drive how the market changes, not just for ETFs but across the funds industry as a whole,” Fitzpatrick stated.

Tokenizing ETFs offers potential benefits including enhanced creation and redemption processes, near-instant settlement, and nonstop access. However, Fitzpatrick noted that while tokenization will eventually become part of the ETF ecosystem, the industry remains a couple of years away from realizing “good use cases.” JPMorgan is already exploring different tokenization applications through Kinexys, the bank’s blockchain business unit.

Both traditional financial institutions and regulators have recently shown increased willingness to tokenize established investments, particularly equities and funds that trade on exchanges closed during weekends. The U.S. Securities and Exchange Commission (SEC) has authorized multiple tokenization efforts, including approving a rule change that enables Nasdaq to support tokenized share trading. Major exchanges and platforms are seeking to scale tokenized equities offerings.

Many analysts project tokenized assets will grow into the trillions over the next decade, with forecasts ranging from approximately $2 trillion to over $10 trillion by 2030.