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

Gate News message, April 26 — JPMorgan’s global head of ETF product and securities services, Ciarán Fitzpatrick, said on Friday (April 25) that tokenization will drive 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.

Tokenization of ETFs is being actively experimented with due to potential benefits including enhanced creation and redemption processes, near-instant settlement, and nonstop access. However, Fitzpatrick noted that the market is still “a couple of years away from some good use cases.” JPMorgan is already exploring various tokenization applications through Kinexys, its blockchain business unit.

Both traditional financial institutions and regulators have recently demonstrated increased willingness to tokenize established investments, particularly those trading on exchanges that close during weekends, such as equities and funds. The SEC has authorized multiple tokenization efforts, including approving a rule change enabling Nasdaq to support tokenized share trading. The New York Stock Exchange, Robinhood, certain major CEXs, and other platforms are all seeking to scale tokenized equities offerings.

Analysts project tokenized assets could reach between $2 trillion and $10 trillion by 2030, with many expecting the market to expand significantly over the next decade.