Over the past decade, tokenisation has shifted from an experimental concept on the fringes of finance to a practical innovation shaping the future of asset management.
Once regarded primarily as the preserve of crypto enthusiasts and start-ups, the idea of issuing and managing financial instruments on distributed ledger technology (DLT) is now being adopted by some of the industry’s most established institutions.
That transformation is clear in our survey of asset managers, which found that more than 60% expect to launch tokenised funds within the next one to five years.
For Anna Matson, head of digital assets innovation for Emea at Chicago-based asset manager and custody bank Northern Trust, this marks a pivotal shift: “We’ve moved beyond exploratory pilots,” she says. “Tokenisation is now part of real-world implementation, client conversations and product roadmaps.”
From Niche to Mainstream
Northern Trust has been building digital asset capabilities for nearly a decade. Its initial work centred on carbon credits: an asset class not typically associated with mainstream investment products.
Yet, as Matson explains, that choice was deliberate: “Our carbon ecosystem project allowed us to experiment with tokenisation from minimum viable product through to full lifecycle management, on blockchain foundations that could then be applied more broadly.”
From there, the bank has engaged in global initiatives ranging from Project Guardian in Singapore—focused on tokenised green bond reporting data—to Project Ensemble in Hong Kong, which integrates cross-border carbon credit trading with wholesale central bank digital currency (CBDC) settlement.
Most recently, Northern Trust has been part of Project Acacia in Australia, using tokenised carbon credits alongside tokenised settlement rails developed in partnership with Swift.
“These projects have been invaluable in combining digital and traditional pieces of the financial ecosystem,” Matson says. “They show how tokenisation can be managed securely and within the governance frameworks that regulators and investors expect.”
Private vs Public Blockchains: A Shifting Debate
The survey revealed that asset managers remain divided over infrastructure, with just over half still favouring private blockchains. This preference reflects the industry’s instinct for compliance, governance and controlled environments. Yet Matson highlights an important trend: growing openness to public blockchain infrastructure.
“This signals a maturing of understanding,” she argues. “Firms are recognising the trade-offs: private chains offer control and security, while public chains can deliver transparency, scalability and interoperability. Increasingly, we see hybrid models emerging to balance privacy with openness.”
For Northern Trust, most tokenisation projects to date have used private blockchains. But the firm is actively exploring where public infrastructure might play a role, particularly as industry collaboration deepens and regulatory clarity improves.
Regulation: The Perennial Hurdle
It is no surprise that regulation remains the most frequently cited barrier to adoption. “That’s not new news,” says Matson, “but it’s a reminder of how important harmonisation is across jurisdictions.”
Europe’s Markets in Crypto-Assets Regulation (MiCA) is viewed as a promising first step, but divergence between regions persists. The US has seen significant regulatory developments in 2025, spurring demand from institutional clients. Meanwhile, activity in Asia-Pacific — from Singapore to Hong Kong and Australia — is driving rapid innovation, albeit under differing local frameworks.
“The balance is between being first and flexible,” Matson notes. “Regulators want to support innovation but also protect investors. Institutions need confidence that rules are stable enough to scale.” To that end, Northern Trust is working closely with regulators and policymakers worldwide to help shape effective, investor-centric frameworks.
Demand and Education
While client interest is growing, not all investors are ready to embrace tokenised funds. The survey shows that a significant proportion of asset managers remain unengaged, often due to uncertainty over demand or lack of internal confidence.
For Matson, investor education is a crucial next step: “End investors don’t care if a product is tokenised for its own sake. They want to know what value it adds — whether through efficiency, transparency or improved returns. The benefits will only become clear at scale, once adoption is broader.”
That scale, however, is now within reach. Northern Trust’s digital assets team, backed by expertise across the organisation, is preparing for the transition from pilots to mainstream deployment. “Innovation isn’t just one group’s job,” Matson stresses. “It’s embedded in all our business units.”
The Road Ahead
Despite the progress, challenges remain. Interoperability between systems is still a technical barrier, although hybrid blockchain environments may help. Legal frameworks continue to evolve unevenly. And industry participants must keep building the case for tokenisation by demonstrating tangible client benefits.
Yet the momentum is undeniable. A decade ago, Northern Trust’s leadership delivered a presentation to its board entitled “Bitcoin versus Blockchain.” Today, the firm is integrating tokenisation into its global product offering. “We are at the cusp of moving from pilots and experiments to real-world implementation at scale,” Matson concludes.
For asset managers, that transition represents both a challenge and an opportunity. Those that embrace tokenisation now will not only streamline operations and enhance transparency but may also unlock new markets and investment models. For others, the risk is falling behind as digital assets become embedded in the financial mainstream.
The question is no longer whether tokenisation will transform funds, but how quickly firms can adapt to capture its value.
The Funds Europe-Caceis report into tokenisation can be viewed by following this link.
