By Henry Zhang, Founder & Group CEO, DigiFT
Every institutional treasury manager understands cash drag — the cost of leaving capital in low-yield or non-yielding instruments while waiting for the next deployment. It is one of the oldest inefficiencies in portfolio management, and serious allocators already have frameworks to manage it. What has changed is the environment in which that inefficiency now exists.
The signals are coming from every direction. BlackRock’s BUIDL peaked at nearly $2.9 billion by mid-2025 and has been accepted as off-exchange collateral on Deribit, Crypto.com, and Binance — allowing institutional traders to post yield-bearing tokenized assets instead of idle cash.[1] In July 2025, Goldman Sachs and BNY embedded tokenized money market funds directly into BNY’s LiquidityDirect platform — the same interface institutional treasurers already use — so tokenized products can appear alongside traditional instruments without changing the workflow.[2] JPMorgan’s Kinexys extended its settlement infrastructure to public blockchains for the first time, achieving cross-chain tokenized asset settlement in collaboration with Chainlink and Ondo.[3]
These are not product experiments. They are infrastructure commitments, made by institutions whose participation shows that this transition is already underway.
DigiFT has been part of that build. In October 2025, Bybit — the world’s second-largest crypto exchange by trading volume — enabled UBS uMINT, distributed through DigiFT, as collateral for institutional trading.[4] In January 2026, we launched the first actively managed tokenized equity fund with BNY as investment management services provider.[5] In April 2026, OCBC, Lion Global Investors and DigiFT launched Southeast Asia’s first tokenized physical gold fund.[6]
Each of these is a different asset class, a different institutional counterparty, and a different use case — but the same underlying conviction: regulated distribution is what makes tokenized capital markets real.
The capital is following. Institutional digital asset AUM surpassed $235 billion by mid-2025, with institutions accounting for 65% of global crypto investment.[7] In a 2026 survey of more than 350 institutional investors by EY-Parthenon and Coinbase, 73% planned to increase their digital asset allocations this year, with over 60% expecting blockchain rails to become significantly integrated into trading, clearing, and settlement within three to five years.[8] 84% are already using or actively evaluating stablecoins — mainly for yield, settlement, and treasury management.[9]
Most of that stablecoin capital earns nothing. It sits between deployments in markets that operate continuously, across every time zone and at any hour of the day. The cash drag problem that treasury managers have managed for decades has found a new and more expensive home — and the infrastructure built to solve it has not kept pace.
That is the problem the next phase of institutional tokenization needs to solve — and it is not simply a technology problem.
To understand why, it helps to start with a trade-off that has existed in institutional capital markets long before tokenization entered the picture.
A Trade-Off That Was Never Supposed to Be Permanent
Digital markets have not created this tension. They have made it structurally unavoidable.
Traditional fund infrastructure was not built to remove this trade-off. Settlement cycles, banking hours, and cut-off times are features of a system designed for markets that close — not for the continuous, cross-time zone operations of institutional digital asset markets.
Trading firms, market makers, and institutional funds active in on-chain markets may need to post and retrieve collateral at any hour, on any day. For these institutions, capital posted as collateral often earns nothing. Capital waiting for settlement is unavailable. The gap between when digital markets demand liquidity and when traditional instruments can provide it is measured in hours that, at institutional scale, add up to real money.
This is not a new inefficiency. But digital markets have made it significantly more expensive — and the current environment makes clear how much it can cost when left unaddressed.
Bull Markets Don't Create the Problem. They Expose the Cost of Ignoring It.
With the 30-year U.S. Treasury yield touching 5% for the first time since July 2025[10] — a move UBS’s Chief Investment Office attributes to oil-driven inflation fears rather than a fundamental shift in monetary policy[11] — institutions holding capital in non-yielding stablecoins or on-exchange positions are paying for it in yield foregone.
The yield/availability trade-off has always carried a cost. In a high-yield environment, that cost is simply harder to ignore.
But this is not a bull market argument. The cost of holding capital in instruments that cannot move at the speed of digital markets exists in every environment. It is simply more visible when yields are elevated. I have seen this dynamic play out across two decades in capital markets: organizations that build durable operational infrastructure do so because the underlying inefficiency is permanent, not because a particular cycle has made it urgent.
The institutions closing this gap now are not just reacting to volatility. They are making a structural decision that will compound in their favor regardless of where markets go next.
Closing that gap requires two things to work together: an instrument built for the operational realities of continuous digital markets, and a distribution layer that can put that instrument in the hands of the investors who need it. The industry has made progress on the former. The latter remains largely unsolved.
Where Instrument Meets Access Layer
This is why the instrument matters as much as the access layer — and why both need to be built for the markets they serve.
Franklin Templeton has spent years building blockchain-native fund infrastructure with this constraint in mind, and its patent-pending Intraday Yield mechanism reflects that. Yield is calculated at one-second resolution and distributed daily on all calendar days, including when positions transfer. A position in the fund earns yield continuously and can be transferred as collateral at any time — without redemption, without waiting for banking hours, and without interrupting accrual.[12]
That is not an incremental improvement on existing instruments. It is a different model for how institutional capital can work.
Franklin Templeton has operated as an SEC-licensed transfer agent for 42 years[13]. Since 2018, its Digital Assets team has built blockchain-native fund infrastructure with a deliberate, multi-jurisdiction commitment — launching the world’s first on-chain money market fund in 2021,[14] expanding to Luxembourg with gBENJI, to Singapore with sgBENJI[15], and developing an institutional-grade tokenized liquidity fund specifically for institutional treasury and collateral management.
That depth of capability in asset manufacturing is genuinely difficult to replicate.
DigiFT was built for the distribution discipline. Our regulatory licenses — from the Monetary Authority of Singapore and the Securities and Futures Commission of Hong Kong — represent years of infrastructure-building that is not glamorous and does not always make headlines, but is what makes institutional capital flows possible at scale.
From day one, our conviction has been that tokenization only achieves institutional relevance if it is built within the frameworks that institutions already trust: regulatory clarity, transparent governance, and operational integrity.
It is harder to build this way. It is also the only path that earns the trust of the capital we are trying to serve.
The result is a partnership that connects an instrument institutional that digital asset operators genuinely need — yield-bearing, 24/7 transferable, backed by U.S. government securities, with yield mechanics designed for continuous markets — with the regulated access layer that makes it reachable.
The Model That Scales
The organizations that define the next stage of institutional tokenization will not necessarily be those with the most technically sophisticated products. They will be those that can close the distribution gap — by putting the right instruments in the hands of the right investors, through regulated channels, consistently and at institutional standards.
I believe this is the model that scales. Not because it is the easiest path, but because it is the only path that connects the supply of high-quality tokenized instruments to institutional demand in a way that can hold up under regulatory scrutiny and through market cycles.
This partnership, and the instrument at its center, represents one step in a much broader build — designed for the wider range of what institutional capital will need as this market matures.
Capital that never sleeps deserves infrastructure that matches it.
Sources
[1] CoinDesk, 18 June 2025: BlackRock’s $2.9B Tokenized Treasury Fund Now Accepted as Collateral on Crypto.com, Deribit. Fortune, 14 November 2025:
[1] BlackRock’s $2.5 billion tokenized money market fund gets boost with Binance tie-up.
[2] BNY/Goldman Sachs joint press release, 23 July 2025: BNY and Goldman Sachs Launch Tokenized Money Market Funds Solution. See also:
[2] BNY newsroom announcement.
[3] JPMorgan/Kinexys press release: Kinexys Achieves Cross-Chain Tokenized Asset Settlement.
[4] Bybit/DigiFT/UBS uMINT press release, 13 October 2025: Collaboration Across Bybit, DigiFT and UBS uMINT Expands Collateral Solution for Institutions.
[5] DigiFT/BNY press release, 26 January 2026: DigiFT Launches Tokenized U.S. Equity Income Fund with BNY as Investment Management Services Provider.
[6] OCBC/Lion Global/DigiFT press release, 20 April 2026: OCBC, Lion Global, DigiFT Launch SEA’s First Tokenized Physical Gold Fund.
[7] CoinLaw, Asset Tokenization and Institutional Crypto Adoption Statistics 2026: coinlaw.io/cryptocurrency-adoption-by-institutional-investors-statistics.
[8] EY-Parthenon/Coinbase, 2026 Institutional Digital Assets Survey (survey of 350+ institutional investors, conducted January 2026): ey.com/en_us/financial-services/institutional-digital-assets-survey.
[9] Coinbase/EY-Parthenon, 2025 Institutional Investor Digital Assets Survey: coinbase.com/institutional/research-insights/research/insights-reports/2025-institutional-investor-survey. 84% of institutions are either already utilizing or expressing interest in utilizing stablecoins.
[10] CNBC, 4 May 2026: Treasury yields jump as oil turns higher, 30-year Treasury yield tops 5%. The 30-year yield reached 5.021%, the highest level since July 2025.
[11] UBS Chief Investment Office Daily, 5 May 2026: UBS CIO House View Daily. UBS CIO maintains its base case of further Fed easing, attributing the yield spike to oil-driven inflation fears following Middle East disruptions rather than a fundamental reassessment of monetary policy.
[12] Franklin Templeton, 10 June 2025: Franklin Templeton Launches Patent-Pending Intraday Yield Feature on Benji Technology Platform.
[13] SEC EDGAR, Franklin/Templeton Investor Services, Inc., registered transfer agent under the Securities Exchange Act of 1934: sec.gov/cgi-bin/browse-edgar. See also: Franklin Resources, Inc. Form 10-K FY1995, SEC Archives.
[14] The Defiant, December 2025: RWAs Became Wall Street’s Gateway to Crypto in 2025. Franklin Templeton debuted BENJI on the Stellar network in 2021 — the world’s first on-chain money market fund.
[15] DBS/Franklin Templeton/Ripple press release, 18 September 2025: DBS and Franklin Templeton to launch trading and lending solutions. Confirms sgBENJI as a Singapore VCC-structured tokenized money market fund.
About the Author
Henry Zhang 在全球金融机构及金融科技创新领域拥有逾二十年的高级管理经验。在创立 DigiFT 之前，Henry 曾在多家国际金融机构担任重要管理职务，包括花旗银行与渣打银行中国区副行长，以及华美银行大中华区首席执行官。在其银行职业生涯中，他主导并推动了多项中国金融科技领域的行业首创项目，包括全球首个跨境资金集中管理系统，以及中国首个中英文双语网上银行平台。
In 2021, Henry founded DigiFT in Singapore to build a next-generation platform for the tokenization, trading, and distribution of institutional-grade real-world assets (RWAs). Under his leadership, DigiFT became the first on-chain exchange licensed by the Monetary Authority of Singapore (MAS), with its Hong Kong entity approved by the Securities and Futures Commission (SFC) for Type 1 and Type 4 regulated activities. Today, Henry works closely with regulators, financial institutions, and the Web3 ecosystem to advance compliant, institutional-grade tokenized finance.
免责声明: DigiFT and/or its affiliates endeavor to ensure the accuracy and reliability of the information provided, but do not guarantee its accuracy or reliability, and accept no liability (whether in tort, contract, or otherwise) for any loss or damage arising from any inaccuracy or omission, or from any decision, action, or non-action based on or in reliance upon the information contained in this material.
This information does not constitute an invitation, recommendation, or offer to subscribe for, purchase, or enter into any transaction involving the above-mentioned product/service or any other services mentioned. The above-mentioned product/service is only available to Accredited Investors, Professional Investors, and Institutional Investors through authorized regulated intermediaries.
Before making any investment decision, please seek independent legal and financial advice. Clients intending to trade this product are reminded of the risks associated with such products and should carefully assess their investment objectives, risk appetite, financial situation, and particular needs before making any investment decision.
This content is for general informational purposes only and does not constitute investment advice, an offer, or a solicitation to buy or sell any product or service. Eligibility to access or invest in any products mentioned is subject to applicable laws and investor qualification requirements. DigiFT products and services are available only through authorized and regulated intermediaries to eligible investors. Readers should seek independent legal, financial, and tax advice before making any investment decision.
