Tokenization is reshaping the global financial order

50 years ago, moving funds around required mailing.

20 years ago, cross-border transactions still took “a few days.”

Today, millisecond-level transactions are no longer worth bragging about.

The real transformation is not about speed, but about reshaping “the way assets exist.”

BlackRock CEO Larry Fink and COO Rob Goldstein have given a sober assessment of this era: In the future, stocks, bonds, real estate, funds, and even currencies will all become “a line of code on the blockchain.”

This is not a crypto story; this is the “restructuring moment” for finance.

Fifty years ago, the movement of funds was as slow as the postal service. When one of us (Larry) started his career in 1976, trades were made over the phone and settled with paper certificates sent by courier. In 1977, a technology called SWIFT enabled standardized electronic messaging between banks, reducing transaction times from days to minutes. Today, trades between New York and London are executed in milliseconds.

Now, the financial industry is entering the next major evolution of market infrastructure—one that can move assets faster and more securely than the systems that have served investors for decades. It began in 2009, when a developer using the pseudonym Satoshi Nakamoto launched Bitcoin as a shared digital ledger capable of recording transactions without intermediaries. A few years later, the same technology—blockchain—sparked something even more transformative: tokenization.

Tokenization involves recording ownership on a digital ledger. It allows almost any asset, from real estate to corporate debt or currency, to exist as a single digital record that participants can independently verify. At first, the financial world—including us—struggled to see the big idea. Tokenization was entangled with the crypto frenzy, which often just seemed like speculation. But in recent years, traditional finance has begun to see what lies beneath the hype: tokenization could vastly expand the world of investable assets, going beyond the publicly listed stocks and bonds that currently dominate the market.

Tokenized assets bring two major benefits. First, they offer the potential for instant settlement of transactions. Today’s markets operate on different settlement timelines, exposing buyers and sellers to the risk that one party may fail to fulfill its obligations. Standardizing instant settlement globally would be another leap forward, surpassing what SWIFT achieved.

Second, private market assets still heavily rely on paper—manual processes, customized settlements, and recordkeeping that lags behind the rest of the financial industry. Tokenization can replace paper with code, reducing the friction that makes asset trading costly and slow. It can convert large, illiquid holdings like real estate or infrastructure into smaller, more accessible units, broadening participation in markets long dominated by large institutions.

Technology alone cannot remove all obstacles. Regulation and investor protection remain crucial. But by reducing costs and complexity, tokenization can offer more ways for more investors to achieve diversification. Early signs of progress are already emerging. Tokens representing “real world” traditional financial assets—stocks, bonds, etc.—still make up a small share of global equity and fixed income markets, but are growing rapidly—up about 300% over the past 20 months.

Many early adoptions are happening in the developing world, where banking services are limited. Nearly three-quarters of crypto holders live outside the West. Meanwhile, the economies that built modern finance—the US, UK, and EU—are lagging behind, at least in terms of where transactions are happening. Granted, many of the companies most likely to lead the transition to a tokenized financial system, including dominant players in the stablecoin space, are US-based. But this early advantage is not guaranteed.

If history is any guide, today’s tokenization is roughly where the internet was in 1996—when Amazon had sold only $16 million worth of books, and three of today’s “Big Seven” tech giants didn’t even exist. Tokenization could develop at the speed of the internet—faster than most people expect, achieving tremendous growth in the coming decades.

It won’t replace the existing financial system overnight. Instead, it’s best thought of as a bridge being built from both sides of a river, meeting in the middle. On one side are traditional institutions. On the other are digital-first innovators: stablecoin issuers, fintech companies, and public blockchains.

Rather than competing, the two sides are learning how to interoperate. In the future, people won’t keep stocks and bonds in one portfolio and crypto in another. All kinds of assets could one day be bought, sold, and held through a single digital wallet.

The task for policymakers and regulators is clear: help build this bridge quickly and safely. The best way isn’t to write a whole new rulebook for digital markets, but to update our existing rules so that traditional and tokenized markets can work together.

We have already seen the power of such connections. The first emerging market ETFs linked stock markets from more than 20 countries into a single fund, making global investing easier. Bond ETFs did the same for fixed income, connecting dealer markets with public exchanges, allowing investors to transact more efficiently. Now, with spot bitcoin ETFs, even digital assets trade on traditional exchanges. Each innovation has been a bridge.

The same principles apply to tokenization. Regulators should aim for consistency: risks should be judged by their nature, not by their packaging. Even if a bond exists on a blockchain, it’s still a bond.

But innovation needs “guardrails”: clear buyer protections to ensure tokenized products are safe and transparent; robust counterparty risk standards to prevent shocks from spreading across platforms; and digital identity verification systems so that people who want to trade and invest can have the same confidence as when swiping a card or sending a wire transfer.

In his new book about the 1929 stock market crash, Andrew Ross Sorkin revisits the failures that led to the birth of the modern financial system. Some were technological: on “Black Tuesday,” ticker machines lagged hours behind, unable to keep up with surging volumes. Others were institutional: a financial system outgrowing its safeguards.

Tokenization can modernize the infrastructure that still makes parts of the financial system slow and expensive, bringing more people into the world’s most powerful engine for wealth creation: the markets. But, as 1929 taught us, every expansion of access must be accompanied by updated safeguards. Tokenization must do two things: develop faster, and develop safely, by building trust.