Asset Tokenization in Financial Markets 2025

Contents35 However, a future trajectory points towards the development of funds composed of natively issued digital assets. Such a shift could improve transparency in the complex ownership structures of instruments such as MMFs. Greater clarity around ownership claims may enhance the suitability of MMFs for use as collateral, potentially supporting broader adoption. There is, however, limited evidence so far to suggest these funds significantly reduce costs, such as fund administrator fees, when compared to conventional models. Often, these funds also provide investor returns that are more in line with their conventional counterparts. Notable examples include: — In 2021, Franklin Templeton launched the Franklin OnChain US Government Money Fund (FOBXX), the first US-registered mutual fund to use a public programmable ledger for transaction processing and share ownership recording.83 Initially on the Stellar network, the fund expanded to other programmable ledgers, including Avalanche and Polygon, demonstrating adaptability. BENJI is the user-facing portal for retail investors to buy and hold shares of FOBXX using digital wallets, and BENJI tokens represent ownership in FOBXX and are recorded on-chain.— In June 2024, Fidelity International tokenized shares of an MMF on Kinexys Digital Assets, piloting a tokenized MMF on the Tokenized Collateral Network (TCN). The fund’s transfer agent (JP Morgan) and the TCN coordinated the tokenization, which improved efficiency in delivering margin requirements and reducing transaction costs and operational frictions by serving as collateral in clearing and margining transactions.84 — In January 2025, Fasanara Capital introduced its first tokenized MMF, the Fasanara MMF Token (FAST), on the Polygon blockchain in collaboration with Tokeny and others. This fund offers investors enhanced efficiency and transparency in money market investments.85Owns Tokenized Fund A sharesTokenized Fund B shares Represent ownership Underlying 1 (e.g. Stock A) Underlying 2 (e.g. Stock B) Money (e.g. HKD, USD) ...Fund legal entity Source: Boston Consulting GroupTokenized assets Underlying 1 (e.g. Stock A) Underlying 2 (e.g. Stock B) Money (e.g. HKD, USD) ...Investors OwnsImplications Allow instant fund ownership changes , enabling secondary transfer of funds through use of blockchain … … while avoiding impact on the operations for underlying assets , given that existing process and infrastructure can be leveragedFund A sharesFund Tokenized fund: Recording fund share ownership in blockchain Fund B shares Represent ownership Fund legal entityTransfer agents Asset managersFIGURE 14 Traditional funds vs. tokenized funds