FINANCE
Big Banks Bet Big on Tokenization: Who Will Win the Custody Race?
USAThu Oct 23 2025
Traditional Finance Meets New Technology
Big banks are diving into the world of tokenization, turning traditional assets into digital tokens. This isn't just about crypto anymore. It's about making old-school finance work better with new tech.
Leading the Charge
Goldman Sachs and BNY Mellon
- Tokenized Money Market Funds: Digital versions of safe, short-term investments.
- Purpose: Smoother operations, faster money movement, and collateral usage for corporate treasurers.
Citi
- Collaboration with SDX: Offering custody and tokenization services for digital securities.
- Efficiency: Bonds and shares can be tokenized and traded more efficiently.
BlackRock
- BUIDL Fund: Holds tokenized Treasury bills.
- Automation: Tokens can be programmed for automatic actions.
- Growth: The fund has seen significant growth in a short time.
The Custody Challenge
- Competition: Banks vs. crypto-native firms like Coinbase and Fidelity.
- Fees: Similar to traditional fund administration fees.
- Advantages: Instant movement and real-time settlement of tokenized assets, cutting costs.
Regulatory Hurdles
- Europe: MiCA rules are making it easier for banks to offer tokenized funds.
- US: Accounting rules remain a hurdle.
- Future: If rules change, the race for custody fees could intensify, with huge potential revenue at stake.
The Race for Control
The future of tokenization hinges on regulation and who controls the flow of funds in this new digital world.
continue reading...
questions
How does the tokenization of real-world assets impact the traditional custody model?
What are the ethical considerations in the tokenization of assets, particularly in terms of data privacy and security?
What are the operational benefits for large institutions in using tokenized treasuries over traditional treasuries?
actions
flag content