JPMorgan says tokenization could change how the fund industry operates, including the exchange-traded fund market.
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- JPMorgan said tokenization could reshape ETFs and the broader fund industry over the coming years.
- Kieran Fitzpatrick said use cases for tokens for ETFs may still be a few years away.
- Tokenized ETFs can support faster settlement, improved redemption, and broader access after regular market hours.
Ciaran Fitzpatrick, Global Head of ETF Products at JP Morgan He said Coding may impact ETFs and broader fund products over time.
“We believe tokenization will certainly drive how the market changes, not just for ETFs but across the fund industry as a whole,” Fitzpatrick said in a post published on Friday.
Tokenizing an ETF can improve settlement
Fitzpatrick said companies continue to test token ETFs because the model could improve the creation and redemption process. It can also support “near-instant settlement” and around-the-clock access for some products.
He said Coding It may become part of the ETF market, but practical use cases still need more time.
“My view on tokenization is that it will become part of the ETF ecosystem, but we are a couple of years away from some good use cases,” he said.
In addition, JP Morgan is already considering tokenization through its blockchain business unit Kinexys. The bank used the unit to explore how blockchain could support financial markets and settlement systems.
The comments show that large financial companies still see value in tokenized assets, even as they take a cautious view on the timing. JP Morgan The situation suggests that tokenization may grow through tested use cases rather than rapid adoption in the market.
Regulators and exchanges are showing increasing interest
Traditional finance companies and regulators have shown greater interest in tokenized assets. The focus has included stocks, funds and other products that are traded only during market hours.
SEC Commissioner Hester Peirce recently urged companies working on tokenized products to speak directly with the agency. The SEC has also authorized some token-related efforts, including changing the Nasdaq rule for token stock trading.
Major companies, including the New York Stock Exchange, Robinhood, Kraken, and Coinbase, are also working on tokenized stock products. Analysts expect the token asset to be as well It arrives trillions of dollars by 2030, although estimates vary widely.
