The Wealth Manager's Kodak Moment

Tokenisation is rewriting the rules of wealth management. Those who don't move now won't get to set the terms on which they compete.

An infrastructure shock, not a product innovation

There is a persistent misconception about tokenisation. Most executives in financial services file it under 'innovation' — something for a strategy day, a working group, maybe a pilot in two years. That is a dangerous underestimation. Tokenisation is not a new product you place next to your existing offering. It is a fundamental shift in the infrastructure on which financial markets operate.

Compare it to the transition from analogue to digital photography, from physical retail to e-commerce, from local servers to the cloud. In each case the underlying product remained recognisable — photographs, goods, computing power — but the infrastructure around it changed so profoundly that companies clinging to the old rails fell structurally behind. Not in decades, but in quarters.

Tokenisation does exactly that to financial services. It replaces the custody, registration, and settlement infrastructure that has remained largely unchanged since the 1970s. Securities are no longer maintained as administrative entries in siloed databases but registered as programmable digital objects on shared, cryptographically secured networks. Settlement moves from T+2 to seconds. Reconciliation — today a multi-billion-dollar industry in its own right — becomes largely redundant. Custody is not abolished, but its nature changes fundamentally.

Tokenisation is not a fintech gadget. It is the most significant infrastructure change in financial services since the dematerialisation of securities in the 1980s.

Why this strikes at the wealth manager's value proposition

The core of the issue: the traditional wealth manager's value proposition has historically rested on three pillars. Access to financial markets and products that retail clients could not reach on their own. Operational handling — the complex web of custody, settlement, reporting, and compliance. And advice — the human expertise that translates all of the above into a client's personal goals.

Tokenisation undermines the first two pillars simultaneously. When securities are represented digitally on open, programmable infrastructure, the exclusivity of access disappears. A tokenised fund does not require a hundred-thousand-euro minimum investment. It fractionalises to any desired denomination. It trades twenty-four hours a day, seven days a week. It settles in real time. The operational complexity that today justifies an entire ecosystem of custodians, transfer agents, fund administrators, and reconciliation departments is reduced to a set of smart contracts and a blockchain.

That means the wealth manager's business model comes under pressure on precisely the two points where it has historically been strongest. Access is being democratised. Operational complexity is being automated. What remains as the differentiating factor is the one thing that cannot be tokenised: the advice, the relationship, the trust.

In 1993, a Kodak executive was asked about digital photography. His response was measured and considered: the technology was interesting, but film quality was superior, clients were not asking for it, and the economics did not yet make sense. He was right on every point. Within fifteen years, Kodak was bankrupt.

The pattern repeats with remarkable consistency. Blockbuster, Nokia, travel agencies, taxi dispatchers. The incumbents were not stupid. They looked at their current clients, their current revenue, their current competitive position — and concluded the disruption was not urgent enough to act on. They were right about the present and catastrophically wrong about the speed of the transition.

Wealth managers who follow the same reasoning today — our clients are not asking for it, the regulation is not clear enough, the business case is not there — are repeating a script that historically ends badly.

What exactly is tokenisation?

Tokenisation is the process of recording the rights to a financial instrument — a bond, a fund unit, a share, a piece of real estate — as a digital token on a distributed ledger (commonly: a blockchain). That token represents exactly the same legal claim as the traditional security, but the way it is held, transferred, and settled changes fundamentally.

Compare it to the transition from physical share certificates to electronic registration in the 1970s and 1980s. The share remained legally identical — it was simply administered differently. The result was a dramatic acceleration of trading, a reduction in costs, and the disappearance of entire layers of intermediaries. Tokenisation is the next step along that same trajectory, but with smart contracts that automatically enforce conditions, with settlement that happens in seconds rather than days, and with a level of transparency that is unthinkable today.

A crucial distinction exists between three forms. First: traditional securities on blockchain infrastructure (a bond registered on Ethereum or a permissioned ledger instead of at Euroclear). Second: new financial products that can only exist in a digital environment (fractional real estate, programmable bonds with automatic coupon payments). Third: digital assets as underlying value (funds investing in cryptocurrencies or other digital assets). These three forms require fundamentally different infrastructure, regulation, and expertise. A wealth manager who wants to 'do something with tokenisation' must first be clear about which variant is relevant for their clients and business model.

Who is doing what: the battlefield in 2025-2026

The most convincing evidence that tokenisation is no longer future music comes from the institutions that typically operate the most conservatively.

BlackRock manages over $2.8 billion in tokenised money market capital through its BUIDL fund, deployed across nine blockchains. This is not an experiment. It is a live product operating at institutional scale, processing real capital daily. CEO Larry Fink called tokenisation in his 2025 annual letter to shareholders "the next revolution in financial markets" — and compared the current moment to the rise of ETFs in the 1990s.

JPMorgan processes more than $2 billion daily in tokenised payments and repo transactions through its Kinexys platform (formerly Onyx). The bank has built a complete digital asset infrastructure layer, including tokenised deposits and interbank settlement.

The London Stock Exchange Group (LSEG) launched its Digital Securities Sandbox in 2025 with eleven of the world's largest banks as investors — including JPMorgan, Citi, BNP Paribas, Deutsche Bank, and UBS. The objective: live settlement infrastructure for tokenised securities using commercial bank money.

State Street ($51.7 trillion in assets under custody) launched its Digital Asset Platform in partnership with Taurus. BNY Mellon ($52.1 trillion) safeguards the assets behind BlackRock's BUIDL and has fully integrated digital custody into its core infrastructure.

In Europe, the pace is at least as fast. Euroclear and Clearstream (D7) already operate live platforms for digital securities. The SIX Digital Exchange in Switzerland runs a fully regulated exchange for tokenised securities. ABN AMRO completed a successful pilot with a digital green bond based on Tokeny's ERC-3643 standard. In Germany, 21X became the first platform to obtain an EU-wide DLT Pilot Regime licence. Cashlink issued a €100 million digital bond for NRW.BANK under Germany's eWpG framework.

The common thread: these are not fintech startups or crypto enthusiasts. These are the institutions that run the financial system today. When BlackRock, JPMorgan, LSEG, State Street, and BNY Mellon simultaneously invest in the same infrastructure shift, that is not a signal to wait. It is a signal that the rails are being relaid.

2026: the year pilots become production

The next eighteen months represent a tipping point. A series of large-scale initiatives will reach the stage of moving from testing to production in 2026. That makes 2026 the year tokenisation shifts from 'interesting to watch' to 'too late to ignore.'

DTCC — the institution that processes $2.5 quadrillion in securities transactions annually — launched ComposerX in January 2025, a platform for managing tokenised collateral. The SEC has provided a no-action letter giving regulatory clearance. The first live tokenisation service is expected in the second half of 2026. When the DTCC, the heart of the American settlement system, starts processing tokens, market infrastructure changes structurally.

Canton Network, the institutional privacy network co-chaired by DTCC and Euroclear, is advancing to production-grade interoperability in 2026. The network already connects dozens of the world's largest financial institutions and processes tokenised assets at a scale that was unthinkable two years ago.

Swift has been running live tests since 2024 with its tokenisation interlink layer, connecting existing messaging infrastructure to blockchain-based settlement. The results are promising: multi-ledger Delivery versus Payment works. A broader production rollout is expected in 2026 for a network that connects more than 11,000 financial institutions.

The ECB is running several wholesale CBDC experiments — Project Pontes (launching 2026) and Appia (longer term) — that will ultimately enable settlement of tokenised securities in central bank money. That resolves one of the last structural bottlenecks: the cash leg of settlement.

Take these initiatives together and the picture comes into focus. The settlement infrastructure, the regulatory frameworks, the custody solutions, and the interbank payment systems are all being prepared in parallel for a world in which securities are digital. Nobody is waiting until every piece of the puzzle is in place — the pieces are being laid simultaneously.

Tokenised equities: the holy grail

So far the market has concentrated on fixed income. Bonds, money market funds, collateral management — the use cases where the gains from faster settlement and lower operational costs are most immediately visible. That makes sense: fixed-income securities are relatively standardised and operational costs are high. Low-hanging fruit.

The real breakthrough, the moment when tokenisation truly transforms the entire value chain, is tokenised equities. And the signals that this is closer than most wealth managers think are unmistakable.

Nasdaq — the world's second-largest stock exchange — is actively investing in blockchain infrastructure and has publicly stated it is working on tokenised equity trading. CEO Adena Friedman called tokenisation "the natural evolution of capital market infrastructure."

DTCC is collaborating with major banks on a framework for tokenised equity settlement. The SEC's no-action letter opens the door for tokens that qualify as securities under existing regulation — including equities.

Morgan Stanley expanded its digital asset platform in 2025 and is actively exploring tokenised investment products for its wealth management clients. The fact that the world's largest wealth manager is moving in this direction is a signal that is difficult to dismiss.

When equity trading moves to tokenised rails, everything changes. Settlement becomes instant. Corporate actions (dividends, voting rights, stock splits) are handled automatically by smart contracts. The need for a chain of intermediaries — from clearinghouses via central securities depositories to transfer agents — shrinks fundamentally. And equities, like tokenised bonds, become fractionally tradable, available 24/7, and immediately transferable.

Tokenised equities are the point at which tokenisation evolves from an operational improvement into a structural reordering of the capital markets.

The digital wallet: the new centre of wealth management

Follow the logic through and you arrive at a future that is closer than most wealth managers find comfortable. When bonds are tokenised, and funds are tokenised, and equities will soon be tokenised — where will they be held?

In a digital wallet. A single place where the client can view, manage, and transfer their entire wealth. Bonds alongside funds alongside equities alongside potentially real estate alongside digital assets. Not spread across three custodians, two brokers, and a fund administrator, but in one integrated environment.

This is not science fiction. BlackRock already integrates its BUIDL tokens into DeFi ecosystems where they function alongside other digital assets. Fireblocks, with more than 400 institutional clients and $110 billion in assets under management, already offers wallet infrastructure that supports tokenised securities, cryptocurrencies, and stablecoins side by side. The technology is here. The regulation under MiCA, the DLT Pilot Regime, and MiFID II accommodates it. The products are arriving at pace.

BCG estimates the market for tokenised real-world assets will grow to $16 trillion by 2030 — roughly 10% of global GDP. McKinsey is more conservative at $2 trillion for tokenised bonds and funds alone. Even in the most conservative scenario, we are talking about a market larger than the entire Dutch equity market.

For the wealth manager's client, this means a fundamentally different set of expectations. The next generation of high-net-worth individuals — the thirty- and forty-year-olds now building or inheriting wealth — have grown up with instant payments, Apple Pay, and investment apps where they can open a position in three taps. That generation will not accept that transferring a fund unit takes three business days, that minimum investments start at €100,000, or that they need a separate structure for their real estate exposure. They expect a digital experience. And if their wealth manager does not offer one, they will find someone who does.

The strategic repositioning that is needed now

The central question for every wealth manager is clear: if access to products is being democratised and operational complexity is being automated, what is the remaining justification for my organisation's existence?

The answer is as clear as it is uncomfortable: the differentiating factor for the wealth manager of the future will no longer be determined by exclusive access to markets — that access is being commoditised. It will no longer be determined by operational reliability — that is being built into smart contracts. It will no longer be determined by the breadth of the product offering — that is becoming infinitely scalable on digital rails.

The wealth manager's competitive edge will be defined by the ability to make the right choices from an overwhelming supply, by deep understanding of the client's personal situation, and by trust that takes decades to build and seconds to destroy.

That is good news for wealth managers who are strong in advice, relationship management, and strategic thinking. It is bad news for wealth managers who earn their margins primarily on operational services, product access, or information asymmetry. Those margins will come down structurally as the infrastructure digitises.

In concrete terms, this means wealth managers must answer three strategic questions now.

First: what position do I take in the new value chain? Do you become an orchestrator who selects and combines the best tokenised products for your clients? A platform provider who creates proprietary tokenised products? Or a pure adviser, fully decoupled from production and distribution? Each model requires different infrastructure choices, different partnerships, and different competencies.

Second: how do I ensure my infrastructure can keep up? Custody partners, settlement systems, portfolio management software — all of it needs to become compatible with digital securities. That does not need to happen tomorrow, but the choices you make now in your IT architecture and partner network determine whether you can participate in two years or not. Vendor lock-in is the single largest strategic risk: choosing proprietary, closed platforms today means being stuck with infrastructure that is not interoperable with the market standard tomorrow.

Third: how do I prepare my clients and organisation? Tokenisation requires knowledge that most wealth managers do not currently possess — not on the work floor, not in the boardroom, and not in the compliance team. Closing that knowledge gap takes time. Organisations that start now will have a lead in eighteen months that is difficult to close.

Conclusion: the window is open, but not for long

Financial services are about to undergo the most significant infrastructure change in forty years. The institutions that run the global financial markets — BlackRock, JPMorgan, DTCC, LSEG, State Street, BNY Mellon, Nasdaq, Swift — are investing billions in tokenised infrastructure. Not as experiments, but as strategic repositioning.

For wealth managers, this translates into a strategic choice that is difficult to defer. The regulation is here: MiCA is live, the DLT Pilot Regime is operational, national regulators have innovation hubs. The technology is here: custody solutions, tokenisation platforms, settlement networks — all available at a level that was unthinkable two years ago. The products are arriving: tokenised bonds, funds, and soon equities are being rolled out at pace.

The only thing still missing at most wealth management firms is a clear answer to the question: what is my position when this transition plays out?

Kodak had an answer to that question. It was rational, well-considered, and entirely wrong.

The wealth managers who invest now in knowledge, infrastructure choices, and strategic positioning are building a lead that will make the difference in two years between a commanding market position and a structural deficit. The window is open. The question is not whether it will close, but when.