In brief
- Joe Moglia, former TD Ameritrade chairman and current chair of Ethereum treasury FG Nexus, says every stock, option, mutual fund, and ETF will be tokenized within five years.
- FG Nexus is also exploring the tokenization of its reinsurance company’s risk exposure.
- Industry experts say the timeline is plausible, even with infrastructure challenges including broker trading rails and the absence of tokenization frameworks in most global markets.
Joe Moglia, former TD Ameritrade chairman and current chair of Ethereum treasury FG Nexus, has declared that every financial asset will be tokenized within five years, with experts saying the transformation will likely unfold unevenly across global markets.
“Five years from now, there’s not going to be a stock, there’s not going to be an option, there’s not going to be a mutual fund, ETF, anything that’s not in effect tokenized,” Moglia told CNBC on Tuesday, describing traditional finance professionals as still struggling to grasp the shift happening in Web3 and DeFi markets.
“Going forward, real-world assets are going to be tokenized as the rest of the world is going to be,” he added, while adding he’s pursuing tokenization of its reinsurance company’s risk as part of its strategy.
His comments come as BlackRock CEO Larry Fink appeared on 60 Minutes advocating crypto ownership after previously dismissing Bitcoin in 2017 as an “index of money laundering,” a shift Moglia attributes to Fink becoming “a DeFi guy” who “appreciates the future.”
BlackRock is developing proprietary tokenization technology and “having conversations with all the major platforms” about digital wallet integration, according to Fink’s recent earnings call.
“We need to be tokenizing all assets, especially assets that have multiple levels of intermediaries,” Fink said, pointing to real estate, where tokenization could reduce fees and make home ownership more affordable by cutting out layers of middlemen.
Fabian Dori, Chief Investment Officer at Sygnum, told Decrypt that tokenization will now “work its way up that risk curve” toward less liquid assets.
“I truly believe ultimately we will have almost every financial asset in a tokenized version because it just helps to automate the value chain, starting from issuance over the primary market, secondary market, the legal anchor, corporate actions, all of this.
Musheer Ahmed, Founder & MD of Finstep Asia, told Decrypt, “while there is significant momentum for tokenization of financial products and I am also bullish on the use case, this timeline of 5 years to tokenize everything is highly optimistic.”
Ahmed noted that the timeline is plausible even as “most trading rails and infra will take many years” and that “the tokenization wave is led by the US, Hong Kong, Singapore, and UAE,” while most markets still “lack frameworks for digital assets.”
The low trading volume in tokenized assets stems from “the nature of the underlying assets,” he said, noting “most RWAs are not liquid or in high demand for daily turnover.”
“Current tokenized products (outside of bonds) are not being actively marketed by brokers, private banks, or investment funds,” he said, and that once they are offered more widely, “demand will pick up and help create a more dynamic secondary market.”
Total real-world assets on-chain have reached $33.91 billion, up 6.6% from 30 days ago, with 483,892 total asset holders, according to RWA.xyz data.
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