Fidelity Says Tokenized Assets’ Main Appeal Is Balance-Sheet Management, Not 24/7 Trading

Fidelity International said the main value of tokenized assets for institutional investors lies in balance-sheet management rather than round-the-clock liquidity.

CoinDesk reported on July 14 that Giselle Lai, Fidelity International’s Asia-Pacific digital asset strategy director, told the WebX conference in Tokyo that balance-sheet management would become the more compelling use case over time.

Global institutions often have to spread cash across multiple bank accounts worldwide to meet regulatory requirements and manage currency risk, Lai said. Most of those deposits generate little or no return. For companies managing liquidity across several bank accounts, tokenized products that generate yield 24 hours a day could offer a more efficient way to manage balance sheets, she added.

Lai also said institutional investors are not seeking tokens for their own sake. Instead, they are asking what tokens can do better than existing tools and looking for faster, cheaper ways to manage assets.

The fastest-growing segment of the tokenized-product market is tokenized money-market funds backed by US Treasuries. Since BlackRock’s BUIDL fund was launched in March 2024, total assets in the segment have surpassed $15 billion. The broader on-chain real-world asset market, excluding stablecoins, is worth more than $31 billion, while the global asset-tokenization market, including alternative investments and tokenized financial infrastructure, is estimated at about $2.1 trillion.

Still, Lai said it would take considerable time for the sector to develop into a full balance-sheet management tool. The ETF industry took nearly 20 years to build a comprehensive ecosystem, and tokenization is expected to evolve in the same way.