Banks Are Ready to Tokenize: The Future of Finance Is Here!

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Moody’s says banks are preparing for large-scale tokenized finance adoption

Big U.S. banks and financial companies are getting ready for a future where digital assets, known as tokenized assets, are widely used. While they anticipate a slow start, they believe adoption will eventually grow very quickly.

Summary

  • Moody’s said major U.S. banks expect tokenization adoption to begin slowly before accelerating across financial markets.
  • The tokenized real-world asset market has climbed more than 420% since the start of 2025, according to RWA.xyz data.
  • Moody’s warned that rapid tokenization growth could pressure payment processors and smaller banks if stablecoins become widely used for settlement.

As a researcher in this space, my recent conversations with U.S. banks and financial firms, as detailed in a new Moody’s report, suggest a broad consensus that tokenization will ultimately become integrated into the financial system. However, there’s still a lot of debate about *when* exactly that will happen and how quickly adoption will progress.

According to Moody’s, people in the financial industry anticipate initial activity in blockchain technology will focus on basic products like funds and short-term investments. Existing financial systems will continue to run as blockchain infrastructure is developed. However, many executives believe that as the market matures and reaches a critical mass, blockchain use will broaden to include more types of assets, applications, and users.

There’s growing excitement on Wall Street and in the crypto world about “tokenization” – turning assets into digital tokens on a blockchain. Companies are looking at this technology to improve how transactions are settled, create digital versions of deposits, and build new financial systems. ARK Invest predicts that digital assets like Bitcoin, DeFi, stablecoins, and even tokenized versions of things like real estate could become a $28 trillion market by 2030.

Banks continue testing tokenized finance infrastructure

While there’s a lot of excitement about blockchain technology, Moody’s notes that its use is still fairly limited. Currently, the main areas seeing significant activity are cryptocurrency trading, making retail payments across borders, and a few specific uses by larger institutions.

The market for tokenized real-world assets has grown significantly, increasing by over 420% since the beginning of 2025 and reaching $31.6 billion by Thursday, according to data from RWA.xyz.

Most major banks and financial institutions are quietly preparing for the growing interest in digital assets. They’re building their own internal teams and experimenting with blockchain technology, but are waiting for clearer signs of widespread demand before fully investing. Moody’s reports that nearly every large financial institution has either created a dedicated digital asset team or is participating in pilot programs to explore new financial systems.

Morgan Stanley is expanding its presence in the cryptocurrency space. Earlier this year, they appointed experienced executive Amy Oldenburg to head up a new crypto division. This followed an announcement that the bank intends to launch three cryptocurrency exchange-traded funds and a digital wallet for customers.

Jordi Visser, a macro investor, believes we might start seeing the real-world impact of tokenization this year. He suggests this will be driven by the increasing use of tokenized assets within AI-powered payment systems.

Moody’s outlines three possible outcomes

On Monday, Moody’s published a new report outlining three potential scenarios for the financial system, based on how quickly digital tokenization becomes widespread.

According to the agency’s most probable forecast for moderate growth, tokenized finance – including things like stablecoins and tokenized deposits – would grow slowly. Traditional financial players like banks and asset managers would likely remain in control of the market.

Moody’s suggests that the growth of tokenized finance could be delayed if legal issues, regulations, and low consumer interest persist. If this happens, tokenized finance would likely stay limited to a few specific uses and wouldn’t significantly change the current financial system.

The agency determined that a period of fast growth in the crypto space poses the biggest threat to the current financial system. If stablecoins and digital tokens become commonly used for completing transactions directly on blockchains, it could significantly impact payment companies, banks that handle transactions for others, and the traditional systems that currently profit from slow processing and outdated infrastructure.

Moody’s cautioned that smaller and medium-sized banks might see a drop in deposits if more customers start using blockchain-based financial systems to manage their money.

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2026-05-14 11:42