Fidelity International's Giselle Lai has reinforced her vision that balance-sheet management is the core value proposition of tokenized assets rather than round-the-clock liquidity. Speaking at the WebX conference in Tokyo on July 14, Lai, the Asia-Pacific digital asset strategy director, emphasized that global institutions often have to spread cash across multiple bank accounts worldwide to meet regulatory requirements and manage currency risk, with most of those deposits generating little or no return. For companies managing liquidity across several bank accounts, tokenized products that generate yield 24 hours a day could offer a more efficient way to manage balance sheets. According to Lai, institutional investors are not seeking tokens for their own sake but are asking what tokens can do better than existing tools and looking for faster, cheaper ways to manage assets.
Fidelity International's Giselle Lai has expanded her vision of tokenization's potential beyond traditional balance sheet management to include pension funds. According to recent reports, tokenization is increasingly being seen as a tool for balance-sheet management among pension funds, with the sector demonstrating significant growth potential. While tokenized products are primarily used for investment, with money market funds backed by U.S. Treasuries being the most popular, their real value for institutional investors lies in their unique properties rather than ease of trading. The enhanced capabilities of tokenized assets over traditional financial wrappers are becoming increasingly apparent to pension fund managers seeking more efficient ways to manage their substantial portfolios.
Tokenized money market funds have gained the fastest traction among stablecoin issuers, treasuries, and platforms requiring always-on yield and collateral mobility. According to Fidelity International, the most popular category is tokenized money market funds, primarily backed by U.S. Treasuries. The largest fund in this category, BlackRock's USD Institutional Digital Liquidity Fund (BUIDL), debuted in March 2024. This category now has more than $15 billion of assets under management (AUM), with the broader onchain real-world asset market (excluding stablecoins) surpassing $31 billion in value. Casting a wider net to include assets such as alternative investments and tokenized financial infrastructures, the global asset tokenization market is valued at roughly $2.1 trillion.
According to forecasts by Grand View Research, the sector is projected to hit $24.5 trillion by 2033, with some industry estimates suggesting tokenized markets could reach as much as $88 trillion by 2035. However, Lai cautioned that it will take decades for tokenization to mature into a comprehensive balance sheet management ecosystem. As reported by Fidelity International, she noted that it took almost 20 years for the ETF industry to build a comprehensive ecosystem, and the same evolution is expected to happen in the tokenization space. Institutional investors are more interested in the properties of tokenized assets compared to their ease of trading, focusing on ways to manage assets faster and cheaper than current methods.
