Tokenization: Redefining Capital Markets
Introductionâ
Tokenization refers to representing ownership of an asset on a blockchain through digital tokens. These tokens can represent financial assets (equities, bonds, moneyâmarket funds), realâworld assets (real estate, art, invoices) or even cash itself (stablecoins or deposit tokens). By moving assets onto programmable, alwaysâon blockchains, tokenization promises to reduce settlement friction, improve transparency and allow 24/7, global access to capital markets. During TOKEN2049 and subsequent discussions in 2024â2025, leaders from crypto and traditional finance explored how tokenization could reshape capital markets.
Below is a deep dive into the visions and predictions of key participants from the âTokenization: Redefining Capital Marketsâ panel and related interviews: Diogo MĂłnica (General Partner, Haun Ventures), Cynthia Lo Bessette (Head of Digital Asset Management, Fidelity Investments), Shan Aggarwal (Chief Business Officer, Coinbase), Alex Thorn (Head of Research, Galaxy), and Arjun Sethi (CoâCEO, Kraken). The report also situates their views within broader developments such as tokenized treasury funds, stablecoins, deposit tokens and tokenized equities.
1. Diogo MĂłnica â General Partner, Haun Venturesâ
1.1 Vision: Stablecoins Are the âStarting Gunâ for Tokenizationâ
Diogo MĂłnica argues that wellâregulated stablecoins are the prerequisite for tokenizing capital markets. In an opinion piece for American Banker he wrote that stablecoins turn money into programmable digital tokens, unlocking 24/7 trading and enabling tokenization of many asset classes. Once money is onâchain, âyou open the door to tokenize everything else â equities, bonds, real estate, invoices, artâ. MĂłnica notes that a few technologically advanced stablecoins already facilitate nearâinstant, cheap crossâborder transfers; but regulatory clarity is needed to ensure wide adoption. He emphasizes that stablecoin regulations should be strictâmodeled on the regulatory regime for moneyâmarket fundsâto ensure consumer protection.
1.2 Tokenization Will Revive Capital Formation and Globalize Marketsâ
MĂłnica contends that tokenization could âfixâ broken capitalâformation mechanisms. Traditional IPOs are expensive and restricted to certain markets; however, issuing tokenized securities could let companies raise capital onâchain, with global access and lower costs. Transparent, alwaysâopen markets could allow investors worldwide to trade tokens representing equity or other assets regardless of geographic boundaries. For MĂłnica, the goal is not to circumvent regulation but to create new regulatory frameworks that enable onâchain capital markets. He argues that tokenized markets could boost liquidity for traditionally illiquid assets (e.g., real estate, smallâbusiness shares) and democratize investment opportunities. He stresses that regulators need to build consistent rules for issuing, trading and transferring tokenized securities so that investors and issuers gain confidence in onâchain markets.
1.3 Encouraging Startups and Institutional Adoptionâ
As a venture capitalist at Haun Ventures, MĂłnica encourages startups working on infrastructure for tokenized assets. He highlights the importance of compliant digital identity and custody solutions, onâchain governance and interoperable blockchains that can support large volumes. MĂłnica sees stablecoins as the first step, but he believes the next phase will be tokenized moneyâmarket funds and onâchain treasuriesâbuilding blocks for fullâscale capital markets.
2. Cynthia Lo Bessette â Head of Digital Asset Management, Fidelity Investmentsâ
2.1 Tokenization Delivers Transactional Efficiency and Accessâ
Cynthia Lo Bessette leads Fidelityâs digital asset management business and is responsible for developing tokenization initiatives. She argues that tokenization improves settlement efficiency and broadens access to markets. In interviews about Fidelityâs planned tokenized moneyâmarket fund, Lo Bessette stated that tokenizing assets can âdrive transactional efficienciesâ and improve access and allocation of capital across markets. She noted that tokenized assets could be used as nonâcash collateral to enhance capital efficiency, and said that Fidelity wants to âbe an innovator⊠[and] leverage technology to provide better accessâ.
2.2 Fidelityâs Tokenized MoneyâMarket Fundâ
In 2024, Fidelity filed with the SEC to launch the Fidelity Treasury Digital Fund, a tokenized moneyâmarket fund on the Ethereum blockchain. The fund issues shares as ERCâ20 tokens that represent fractional interests in a pool of government treasuries. The goal is to provide 24âhour subscription and redemption, atomic settlement and programmable compliance. Lo Bessette explained that tokenizing treasuries can improve operational infrastructure, reduce the need for intermediaries and open the fund to a wider audience, including firms seeking onâchain collateral. By offering a tokenized version of a core moneyâmarket instrument, Fidelity wants to attract institutions exploring onâchain financing.
2.3 Regulatory Engagementâ
Lo Bessette cautions that regulation is critical. Fidelity is working with regulators to ensure investor protections and compliance. She believes that close collaboration with the SEC and industry bodies will be necessary to gain approval for tokenized mutual funds and other regulated products. Fidelity also participates in industry initiatives such as the Tokenized Asset Coalition to develop standards for custody, disclosure and investor protection.
3. Shan Aggarwal â Chief Business Officer, Coinbaseâ
3.1 Expanding Beyond Crypto Trading to OnâChain Financeâ
As Coinbaseâs first CBO, Shan Aggarwal is responsible for strategy and new business lines. He has articulated a vision where Coinbase becomes the âAWS of crypto infrastructureâ, providing custody, staking, compliance and tokenization services for institutions and developers. In an interview (translated from Forbes), Aggarwal said he sees Coinbaseâs role as supporting the onâchain economy by building the infrastructure to tokenize realâworld assets, bridge traditional finance with Web3 and offer financial services like lending, payments and remittances. He notes that Coinbase wants to define the future of money rather than just participate in it.
3.2 Stablecoins Are the Native Payment Rail for AI Agents and Global Commerceâ
Aggarwal believes stablecoins will become the native settlement layer for both humans and AI. In a 2024 interview, he said that stablecoins enable global payments without intermediaries; as AI agents proliferate in commerce, âstablecoins are the native payment rails for AI agentsâ. He predicts that stablecoin payments will become so embedded in commerce that consumers and machines will use them without noticing, unlocking digital commerce for billions.
Aggarwal contends that all asset classes will eventually come onâchain. He points out that tokenizing assets such as equities, treasuries or real estate allows them to be settled instantaneously and traded globally. He acknowledges that regulatory clarity and robust infrastructure are prerequisites, but he sees an inevitable shift from legacy clearing systems to blockchains.
3.3 Building Institutional Adoption and Complianceâ
Aggarwal emphasizes that institutions need secure custody, compliance services and reliable infrastructure to adopt tokenization. Coinbase has invested in Coinbase International Exchange, Base (its L2 network), and partnerships with stablecoin issuers (e.g., USDC). He suggests that as more assets become tokenized, Coinbase will provide âoneâstopâshopâ infrastructure for trading, financing and onâchain operations. Importantly, Aggarwal works closely with policymakers to ensure regulation enables innovation without stifling growth.