By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions.
“Tokenization is like a freight train. It can’t be stopped, and eventually it’s going to eat the entire financial system,” Vlad Tenev told a panel at a cryptocurrency conference in Singapore on Wednesday (Oct. 1).
“I think most major markets will have some framework in the next five years,” said Tenev, whose comments were reported by CNBC.
The CEO added that reaching 100% could take more than a decade. As that report notes, a tokenized asset is a digital representation of a real-world asset, such as stocks, bonds or commodities, that can be recorded and traded on a blockchain.
Robinhood in June began offering more than 200 tokenized U.S. stocks to customers in the European Union, bringing the company’s stock to what was then a record high.
“I think it will become the default way to get exposure to U.S. stocks outside the U.S.,” Tenev said, adding that he expects the practice to expand after there is more clarity around licensing and regulations throughout the world.
“I think that will come, starting in Europe, but then expanding to the rest of the world,” he said.
Beyond Robinhood’s launch of tokenized stocks, the CNBC report points out that there have been other indications of tokenization’s growing popularity, with financial sector titans Morgan Stanley and BlackRock expressing interest.
“I actually think cryptocurrency and traditional finance have been living in two separate worlds for a while, but they’re going to fully merge,” Tenev said at the event.
Tenev is not alone in forecasting the transformative effect of tokenization. As covered here last month, the Bank for International Settlements (BIS) has said tokenized money and assets could reshape monetary policy and payments.
“A BIS study said a tokenized, unified ledger run by public authorities could replicate stablecoin benefits without private-coin risks,” PYMNTS wrote. “The BIS and Federal Reserve Bank of New York also co-authored experimental work showing how smart contracts might automate liquidity operations and policy transmission.”
The Federal Reserve, meanwhile, has emphasized the need for interoperable standards on settlement finality, identity and dispute resolution to make sure tokenization scales responsibly.
“Together, these projects underscore how public authorities aim to integrate tokenization into regulated infrastructures while private firms race ahead with commercial deployments,” that report concluded.
