When core allocation mandates move on-chain, tokenization becomes structurally relevant
Amos Song | Chief Business Officer at DigiFT
The Inflection Point Is Not Where Most People Think
Over the past two years, institutional tokenization has been measured by the growth of tokenized Treasuries, money market funds, private credit, and single-asset representations. That framing, while useful, is incomplete.
These instruments demonstrate that digital rails can function at scale. They improve settlement mechanics and expand digital liquidity pools. But most sit at the periphery of institutional portfolios. Capital markets do not change when peripheral instruments digitize. They change when core allocation mandates — the strategies that actually drive long-term portfolio outcomes—can operate on regulated on-chain infrastructure.
That threshold is what tokenization is beginning to cross. And to understand why this moment is different, it helps to be precise about what the first wave actually proved—and what it did not.
What Early Tokenization Actually Proved
The first wave of institutional tokenization focused on instruments that were standardized, yield-bearing, and closely tied to liquidity and settlement. This was rational. The path of least resistance was always going to run through assets that were already widely understood, easily priced, and operationally simple to represent on-chain.
The results have been significant. Tokenized U.S. Treasuries now represent over $10.8 billion in on-chain value—a figure that stood below $4 billion at the start of 2025 and reflects a 490% year-on-year expansion in institutional DLT activity.[1] Global stablecoin supply has crossed $312 billion, establishing the liquidity backbone that digital markets require.[2] And Broadridge’s Distributed Ledger Repo platform processed an average of $368 billion in daily repo transactions in November 2025—a 466% increase on the same month in 2024—demonstrating that DLT infrastructure is now operating at genuine institutional scale.[3] Meanwhile, U.S. public markets compressed settlement cycles from T+2 to T+1 in May 2024, reflecting a broader systemic push toward faster capital mobility.[4]
Taken together, these developments confirm that digital rails are no longer experimental. They are operational.
But here is the limitation the first wave also revealed: liquidity instruments and short-duration exposures are not what define institutional return profiles. Tokenizing cash is not the same as tokenizing a portfolio. The former optimizes capital movement. The latter shapes asset allocation. And until recently, the structural question of whether professionally governed allocation strategies—diversified mandates with embedded risk management and fiduciary oversight—could operate on regulated on-chain infrastructure remained unanswered.
The Allocation Threshold
Institutional portfolios are built around mandates. Equities, credit, real assets, multi-asset strategies—these exposures drive long-term growth, income generation, and risk management. The question that matters is not whether tokenization can represent an asset, but whether it can support the entire operating architecture around a strategy: governance, compliance, fiduciary oversight, and ongoing portfolio management.
Single-stock tokenization demonstrated that access could be digitized. Tokenized cash instruments demonstrated that settlement could be optimized. Neither answered the harder question: can an actively managed, multi-security allocation strategy—with all the institutional infrastructure it requires—function within a regulated on-chain framework without compromising the standards that institutional allocators demand?
This distinction matters because it determines whether tokenization becomes a marginal operational enhancement or a genuine architectural shift. Marginal enhancements improve how existing capital moves. Architectural shifts change where institutional capital can live and how it can be deployed. The latter is what becomes possible when portfolio-level mandates, not just individual instruments, move on-chain.
Infrastructure Is Converging—But the Demand Signal Is Institutional
The enabling conditions for this shift have been building for several years. Custodians globally are expanding digital asset servicing capabilities alongside traditional models. Settlement compression in major markets reflects regulatory and systemic demand for reduced counterparty exposure. Distributed ledger technology has moved from pilot programs to production infrastructure at systemically important institutions.
But infrastructure alone does not create demand. What has changed is that the institutional demand signal has become quantifiable. According to a 2025 survey of 352 institutional investors conducted by Coinbase and EY-Parthenon, 76% of firms intend to invest in some form of tokenized assets by 2026, driven predominantly by portfolio diversification goals.[5] A separate EY-Parthenon survey projects that institutional investors will dedicate an average of 5.6% of their portfolios to tokenized assets by 2026, with high-net-worth investors projecting an even higher allocation of 8.6%.[6] That is allocation-scale demand, not peripheral experimentation.
The implication is that the institutions positioned to capture this demand are those capable of bringing full portfolio mandates on-chain—not just yield products or settlement optimizations, but the strategies that institutional capital actually allocates to in size.
Implications for Traditional Allocators
For traditional institutions exploring on-chain infrastructure, the emergence of tokenized allocation mandates does not alter investment strategy, market exposure, governance frameworks, or risk discipline. These remain unchanged. What changes is infrastructure optionality.
On-chain representation introduces digitally native ownership records, lifecycle transparency, alignment with shortening settlement frameworks, and interoperability with digital collateral and liquidity pools. For institutions already interacting with stablecoins or digital custody environments, this reduces fragmentation between capital pools—enabling a single strategy to be accessed, managed, and deployed across both traditional and digital operating environments without maintaining parallel infrastructure.
This is not about replacing established routes to access equity or credit strategies. It is about expanding how those strategies can be mobilized—and for institutions managing increasingly complex multi-jurisdictional capital flows, that optionality has tangible operational value.
Implications for Web3-Native Capital
For Web3-native funds, foundations, and treasury managers, the implications are more structural—and more urgent. Digital capital pools have grown rapidly. Stablecoin balances across protocols and exchanges represent hundreds of billions in deployable liquidity. Yet portfolio construction within these ecosystems often remains heavily concentrated in crypto-native exposures, with limited access to diversified real-economy strategies.
The consequence is a structural gap: large pools of on-chain capital with no native pathway to the diversified, actively managed strategies that institutional allocators rely on for long-term portfolio outcomes. Actively managed public market strategies on regulated on-chain infrastructure close this gap directly. They introduce diversification into real-economy earnings streams, income profiles historically distinct from crypto market cycles, institutional governance and fiduciary frameworks, and longer-duration allocation tools—all within an infrastructure environment that Web3-native treasuries can access without routing capital through off-chain settlement and custody systems.
That last point matters operationally. Treasury design for on-chain entities has historically required a fragmented architecture: on-chain liquidity for protocol operations, off-chain allocations for portfolio strategies, with friction at every handoff. When portfolio mandates can exist natively on regulated on-chain infrastructure, that fragmentation is addressable.
From Asset Tokenization to Portfolio Integration: The DigiFT x BNY Example
Abstract arguments about tokenization’s trajectory are useful. Concrete examples are more useful.
The announcement between DigiFT and BNY Investments to bring an actively managed U.S. equity income strategy onto regulated on-chain infrastructure is significant precisely because it addresses the structural question that the first wave of tokenization left open. This is not a tokenized Treasury. It is not a stablecoin. It is an actively managed multi-security allocation mandate—the kind of strategy that defines institutional return profiles—operating within a regulated digital framework.
In Singapore, where DigiFT is licensed and regulated, tokenized capital markets products of this kind are governed under the Securities and Futures Act 2001 (SFA), administered by the Monetary Authority of Singapore (MAS). MAS adopts a technology-neutral, substance-over-form approach: the tokenization of a capital markets product does not alter its underlying legal and economic substance, and tokenized CMPs are regulated in the same manner as their non-tokenised counterparts under the principle of “same activity, same risk, same regulatory outcome.”[7] This regulatory framework is precisely what makes the DigiFT x BNY Investments announcement structurally meaningful: it demonstrates that a professionally governed allocation mandate can operate within a regulated digital environment without compromising institutional standards.
The significance lies not in novelty but in what it demonstrates: that the allocation threshold described above is crossable. That professional governance, fiduciary oversight, and active portfolio management are not incompatible with on-chain infrastructure. And that the gap between what institutional allocators need and what on-chain environments can offer is closing in a meaningful way.
This is the progression that matters: liquidity instruments proved viability; private credit expanded distribution; single-asset representations demonstrated access; portfolio-level strategies signal integration. Each step required the previous one. But only the last one changes what institutional capital can actually do on digital rails.
The Market Is Entering Its Architectural Phase—And This Is Just the Beginning
Tokenization is no longer a question of technological feasibility. The infrastructure exists. Regulatory frameworks are maturing—from MAS and the SFA in Singapore[7] to MiCA in Europe and the GENIUS Act in the United States.[8] Custodians are building digital capabilities alongside traditional servicing models. Settlement systems are compressing. And institutional demand for tokenized asset exposure is becoming quantifiable rather than speculative.
But step back further, and the current moment looks less like an arrival than a prologue.
A single tokenized equity income strategy operating on regulated on-chain infrastructure is significant. What it points toward is more significant still. The logical extension of bringing one actively managed mandate on-chain is bringing many. From there, the architecture suggests itself: not just individual tokenized strategies, but on-chain investment vehicles—equity vaults, multi-asset sleeves, income-generating structures—designed from the ground up for digital operating environments and managed by the same institutional names that have defined asset management for decades. BNY is one such name. There will be others.
The practical implications compound quickly. An on-chain equity vault managed by a global asset manager would not merely replicate a traditional fund in digital form. It could enable real-time NAV transparency, programmable distribution mechanics, interoperability with digital collateral systems, and seamless integration with the broader on-chain capital ecosystem—all while preserving the fiduciary standards and governance frameworks that institutional allocators require. The product category does not yet have a settled name. The infrastructure to support it is being built now.
What bEQTY represents—and what the DigiFT x BNY Investments announcement signals more broadly—is that the foundational question has been answered. Portfolio-defining mandates can operate on digital rails. The harder and more interesting questions are now ahead: how quickly does the product set expand, which asset classes follow, which custodians and managers commit at scale, and what the on-chain institutional portfolio looks like when it matures.
The inflection point was never about how much liquidity could be tokenized. It was about when the strategies that actually shape institutional portfolios could operate on digital rails. That boundary has moved. What lies beyond it is still being built.
This article was prepared in connection with the DigiFT x BNY Investments event: Tokenization Beyond Cash — Building Portfolio-Relevant Strategies On-Chain.
参考文献
[1] RWA.xyz, Tokenized U.S. Treasuries (live data tracker). Current value $10.8B as of February 2026, up from $8.9B on 1 January 2026. See also: CryptoBreaking, “Tokenized U.S. Treasuries Rise Over $1B Since 2026 Began” (February 2026).
[2] Stablecoin total market capitalisation: $312 billion as of early 2026. Sources: DeFiLlama (live tracker, defillama.com/stablecoins); MEXC News, “Stablecoin Market Tops $317 Billion” (January 2026); Decrypt/Yahoo Finance, “The Year in Stablecoins 2025” (December 2025), reporting growth from $205B in January 2025 to $306B by end of November 2025.
[3] Broadridge Financial Solutions press release, “Broadridge’s Distributed Ledger Repo Platform Processes $368 Billion in Average Daily Trade Volumes in November” (4 December 2025). 466% year-on-year increase.
[4] U.S. SEC and DTCC, T+1 settlement cycle implementation, effective 28 May 2024. See SEC Release No. 34-96930 、 DTCC implementation documentation.
[5] Coinbase Institutional and EY-Parthenon, “2025 Institutional Investor Digital Assets Survey” (January 2025). Survey of 352 institutional investors globally. 76% of respondents intend to invest in some form of tokenized assets by 2026. https://www.coinbase.com/institutional/research-insights/research/insights-reports/2025-institutional-investor-survey
[6] EY-Parthenon, “Tokenization in Asset Management” (2023). Survey of 251 HNW investors and 78 institutional asset investors in the United States. Institutional investors projected to allocate an average of 5.6% of portfolios to tokenized assets by 2026; HNW investors projected at 8.6%. https://www.ey.com/en_us/insights/financial-services/tokenization-in-asset-management
[7] Monetary Authority of Singapore, revised Guide on the Tokenisation of Capital Markets Products (2025). Tokenised CMPs are regulated under the Securities and Futures Act 2001 (SFA) and the Financial Advisers Act 2001 (FAA) in the same manner as non-tokenised counterparts. MAS applies a “same activity, same risk, same regulatory outcome” principle. See also: Bird & Bird, “MAS Issues Revised Guide on Tokenisation of Capital Markets Products” (December 2025).
[8] EU Markets in Crypto-Assets Regulation (MiCA), fully in effect from December 2024. U.S. Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), signed July 2025, establishing a federal regulatory framework for stablecoins. See: Decrypt, “The Year in Stablecoins 2025” (December 2025).
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