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Tokenization: A new era for financial markets

2026-08-23 12:25:33
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Tokenization: A new era for financial markets

According to John Hoffman, head of product portfolio at Ondo Finance, the pace of popularity of tokenization is similar to the early stages of development of exchange-traded funds (ETFs). The current doubts surrounding tokenization are reminiscent of the initial hesitation faced by the ETF market. Hoffman believes that as long as the product structure is reasonable and the regulatory framework is in place, the popularity of tokenization is expected to accelerate rapidly.

How fast is it growing?

Tokenized assets are growing at an unprecedented rate. Hoffman pointed out that it took about three years for stablecoins to reach US$1 billion in assets, while tokenizing U.S. Treasury bonds achieved this milestone in just 18 months, and tokenizing stocks only took six months. Ondo Stocks achieved similar growth in about eight months.

John Hoffman emphasized that tokenization, like the early ETF market, is a technology that can change market structure and simplify international sales.

This accelerated timetable shows that the matching of products to market demand is being achieved faster. Just as ETFs have become a fundamental part of the market, tokenized assets may undergo a similar transformation.

What does market integration depend on?

Hoffman explained that clear regulation, broker support and standardized portfolio settings are key factors in the widespread adoption of ETFs-elements that are also seen as necessary for successful tokenization. For large investors and institutions, the ability to quickly execute transactions, pledge collateral and use stablecoins for settlement is the main advantage.

In addition, exchanges and custodians are using existing infrastructure to integrate tokenized stocks and bonds to more effectively interface traditional financial instruments with blockchain-based systems.

Platforms like DefiLlama and RWA.xyz point out that Ethereum, Stellar and Polygon are emerging networks that attract issuer interest and expand their presence in securities infrastructure.

Institutional support and regulatory clarity are critical to market integration. Tokenized assets are rapidly becoming an indispensable part of the financial system. Platforms that integrate blockchain networks with traditional finance are leading this trend.

Hoffman believes that the gradual improvement of the regulatory framework for tokenized assets in the United States may complement similar securities regulatory systems in the European Union and the United Kingdom, thereby promoting compatibility in global markets.

Increased liquidity in the secondary market, improvement of broker licenses and cross-chain standardization were highlighted as factors that may drive growth. A successful tokenization process can drive the evolution of the ETF model, introducing a programmable market that runs 24 hours a day, 7 days a week, while maintaining high liquidity and high regulatory standards.

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