Tokenized Funds Market Surges 260% in First Half of Year

The global market for tokenized funds is experiencing a significant surge, with major financial institutions increasingly investing in this emerging sector. According to recent insights, the scale of tokenized asset management has reached 230 million dollars in the first half of this year, marking a 260% increase from January. Notably, the market value of tokenized government bonds has reached 75 million dollars.

The report predicts that by 2030, tokenized funds will account for 1% of the global asset management market, exceeding 6000 million dollars. This growth is not limited to traditional money market funds but also extends to alternative assets such as private equity, which are rapidly being tokenized. The significant growth in tokenization reflects the increasing recognition by institutional investors of the potential of blockchain technology in traditional finance.

This trend is exemplified by a recent collaboration between a prominent investment bank and a major financial services company to launch the first tokenized money market fund solution in the United States. This initiative marks the formal entry of this innovative financial tool into the U.S. market, with participation from prominent institutions. The rapid development of tokenized funds globally is attributed to an increasingly robust regulatory environment and the growing demand from institutional investors for enhanced liquidity and cost reduction.

Money market funds are at the forefront of this innovation wave, with over 335 tokenized real asset products currently operational on the blockchain. A leading asset management firm's fund, in collaboration with a securities compliance platform, has an asset management scale exceeding 29 million dollars, making it the largest tokenized money market fund globally. Other key participants include various financial institutions developing their own tokenized money market fund projects.

The involvement of these heavyweight institutions indicates a growing market demand for native blockchain liquidity. Private equity and other alternative assets are also gaining attention in the tokenization space. The tokenized fund market is projected to expand from 400 million dollars in 2023 to 3170 million dollars by 2028, with significant growth expected in private equity, private debt, real estate, and other alternative strategies. According to a survey, a majority of institutional investors consider private equity their top choice for tokenized alternative investments. Various diversified credit funds and other tokenized private credit strategies offer qualified institutions investment opportunities within a compliant framework. Investors can obtain tokens, representing their on-chain equity in traditional credit funds. A key feature is the ability to mint derivative tokens, which can be used as flexible collateral on decentralized finance platforms to borrow stablecoins.

The collaboration between the investment bank and the financial services company marks a significant milestone for tokenized money market funds in the United States. This solution enables U.S. fund management companies to purchase money market fund shares through the financial services company's platform, utilizing the investment bank's blockchain-based platform. The platform acts as the tokenized manager, facilitating the purchase and redemption of money market funds and the on-chain minting and destruction of tokens. These tokens mirror the off-chain securities holdings and may directly represent securities holdings in future phases.

The initial opportunities lie in collateral management. Traditional mutual funds face limitations in ownership records, making them ineffective as collateral within the ecosystem. Tokenized funds have the potential to alleviate these frictions, unlocking the value of asset classes. During market volatility, there is often a significant fluctuation in margin calls, typically requiring cash to meet these demands. This often leads to the redemption of money market funds, exacerbating pressure on underlying assets. By mobilizing money market funds on a T+0 basis and expanding their use in collateral liquidity, potential benefits for financial stability can be realized.

The regulatory environment for fund tokenization is becoming increasingly clear, creating favorable conditions for market development. In April 2025, a major regulatory body approved the world's first tokenized money market ETF, further broadening potential liquidity benefits and demonstrating strong interest in interoperable token formats. The United Kingdom's implementation blueprint for fund tokenization provides a phased approach aimed at enhancing market efficiency and transparency. The UK's financial regulatory authority has consistently supported industry efforts and recognizes the potential of fund tokenization, planning to consult on guidance to support the blueprint's tokenization model. While the U.S. regulatory body has not yet issued a specific regulatory framework for tokenized funds, regulatory signals are becoming increasingly positive. Industry participants have already launched tokenized fund products, demonstrating the commercial viability of this sector.