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

Gate News message, April 27 — Ciarán Fitzpatrick, JPMorgan’s global head of ETF product and securities services, said tokenization should drive change across the entire funds industry. “We believe tokenization will certainly drive how the market changes, not just for ETFs but across the funds industry as a whole,” Fitzpatrick stated in a post published on Friday (April 25).

Fitzpatrick highlighted potential benefits of tokenized ETFs, including enhanced creation and redemption processes, near-instant settlement, and nonstop access. However, he cautioned that “it will become part of the ETF ecosystem, but we’re a couple of years away from some good use cases.” JPMorgan is exploring different tokenization use cases through Kinexys, the bank’s blockchain business unit.

The push for tokenization is gaining momentum among both traditional financial institutions and regulators. The SEC has authorized various tokenization efforts, including approving a rule change enabling Nasdaq to support tokenized share trading. SEC Commissioner Hester Peirce has encouraged firms exploring tokenized products to engage directly with the agency. Major market participants including the New York Stock Exchange, Robinhood, and several major cryptocurrency exchanges are all developing tokenized equities offerings.

Market analysts expect tokenized assets to reach significant scale over the next decade, with projections ranging from approximately $2 trillion to more than $10 trillion by 2030.

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