Forget ETFs, Let’s Work on Tokenizing the Whole Value Chain

“Tokenization” — the biggest buzzword in crypto markets currently — means not just bringing new digital assets on-chains, but, in the future, originating and settling them on-chain as well.

AccessTimeIconFeb 7, 2024 at 5:01 p.m. UTC
Updated Mar 8, 2024 at 9:11 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

The last six months in crypto markets have been dominated by two main narratives: the prospect of Bitcoin ETFs (which were finally approved by the SEC in January) and so-called real world assets (RWAs). Interestingly enough, these themes represent two sides of the same coin: Bitcoin ETFs take digitally-native assets off-chain, while RWAs bring traditional assets on-chain.

Both traditional and decentralized finance experts have hailed these related innovations. BlackRock CEO Larry Fink, for example, told CNBC, “ETFs are step one in the technological revolution in the financial markets. Step two is going to be the tokenization of every financial asset.”

  • Philippines Taps Blockchain
    Philippines Taps Blockchain
  • BlackRock CEO Predicts Tokenization Is the Future of Markets
    BlackRock CEO Predicts Tokenization Is the Future of Markets
  • Tokenization on Public Blockchains Democratizes Access: Securitize CEO
    Tokenization on Public Blockchains Democratizes Access: Securitize CEO
  • Bitcoin Bounces Back Above $20K
    Bitcoin Bounces Back Above $20K
  • So, what about Step Three?

    You're reading Crypto Long & Short, our weekly newsletter featuring insights, news and analysis for the professional investor. Sign up here to get it in your inbox every Wednesday.

    I would argue that bringing the entire value chain, not just the end product, on-chain should be the final objective for all financial assets. That includes equities, fixed income, cash equivalents, alternative investments, and the many structured products that build on top of them.

    Making digital assets available off-chain may have advantages. Bringing traditional assets on-chain might too. But this hardly scratches the surface of what blockchain can do for capital markets. Unparalleled efficiency, transparency, and programmability can be enabled from origination and issuance to settlement and custody. Bringing traditional assets on-chain is one thing; building them entirely on-chain is another.

    This is already happening in small ways today. When users buy structured products that are natively built on-chain, they can issue, redeem, swap, and self-custody products permissionlessly, without dependencies on intermediaries. On-chain automation also enables rebalancing and reweighting for products to be self-sustaining. Anyone can independently verify the technology stack underpinning each product, minimizing trust and maximizing transparency. These capabilities can extend to all asset classes, not just the ones on-chain today.

    Traditional financial firms like WisdomTree are already pushing past simple token wrappers and embracing broader blockchain capabilities for capabilities like settlement, record-keeping, and exchange infrastructure. J.P. Morgan Onyx is also exploring on-chain settlement and rebalance execution for alternative assets and broader portfolio management as well.

    Blockchain-native organizations like Goldfinch and Maple are also bringing credit markets on-chain with lending facilities and secured collateral. Other asset classes like real estate (RealT), private equity (Tokeny), and carbon credits (Toucan) are coming on-chain too.

    Granted, there is regulation to consider and technology to develop, but the collective opportunity to move beyond Bitcoin ETFs and tokenized RWAs is immense. In a future where all assets are built, managed, and distributed on-chain, investors, asset managers, and even regulators will benefit from the transparency, efficiency, and disintermediation that results. Lower costs, global distribution, and more efficient markets await on the other side.

    Edited by Benjamin Schiller.


    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Allan Gulley

    Allan Gulley is the Head of Product at Index Coop.

    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.