Fidelity Strategist: Tokenized Funds Target Institutional Balance Sheet Efficiency
Fidelity International’s Giselle Lai argues that tokenized assets will primarily serve as balance-sheet management tools for global institutions, signaling a shift in how the multi-trillion-dollar real-world asset market will mature.
Global institutions will ultimately derive the greatest value from tokenized funds through enhanced balance-sheet management rather than continuous trading liquidity, according to Fidelity International. Giselle Lai, director and digital assets strategist for APAC at the firm, detailed this perspective during an interview at the WebX conference in Tokyo.
Multinational corporations and financial entities currently must hold cash across multiple worldwide bank accounts to meet regulatory requirements, manage currency exposure, and ensure liquidity. These fragmented deposits frequently earn no return, and shifting balances between jurisdictions in a timely manner remains a persistent operational challenge.
Tokenized money market funds and other onchain instruments offer a solution by allowing pensions, insurers, and companies to deploy cash more efficiently. These real-world assets represented on blockchain ledgers can move seamlessly, generate yield continuously, and integrate with broader liquidity needs.
"I think over time, the more appealing use case will be balance sheet management," Lai said. She noted that institutional investors are not necessarily demanding tokens for their own sake. "Generally speaking, they are not asking for tokens," Lai said. "They are asking for what tokens can do more compared to the existing wrappers they already have."
This demand for faster, cheaper asset management explains the rapid traction of tokenized money market funds, which are primarily backed by U.S. Treasuries. BlackRock’s USD Institutional Digital Liquidity Fund, known as BUIDL, launched in March 2024 and helped drive this category to over $15 billion in assets under management.
The broader onchain real-world asset market, excluding stablecoins, has now surpassed $31 billion in value. When expanding the definition to include alternative investments and tokenized financial infrastructures, the global asset tokenization market is currently valued at approximately $2.1 trillion.
Market forecasts suggest massive expansion ahead, with Grand View Research projecting the sector will reach $24.5 trillion by 2033. Some industry estimates place the potential market size at $88 trillion by 2035, while recent data shows real-world asset perpetual volumes already surging to a record $311 billion in June.
Despite this momentum, Lai cautioned that building a comprehensive balance-sheet management ecosystem will not happen overnight. She compared the trajectory to the exchange-traded fund industry, noting it took almost two decades to build a comprehensive ecosystem and the same evolution will occur in tokenization.
