The Reality Check: What Tokenization Really Demands of Your Infrastructure

This three-part series cuts through the hype and looks at tokenization through the only lens that matters: operating models. We explore how early pilots are moving into production, where data, lifecycle events, NAV and controls start to crack, and what it takes to build tokenized products that actually work. In Part 1, Yamelin Castillo looks at how tokenization is shifting from buzzword to infrastructure test, and what that means for private markets managers…  

As 2025 draws to a close, real-world asset (RWA) “tokenization” has become more than just an industry buzzword; it is steadily becoming part of the private-markets landscape. What once sounded like a far-off experiment is now showing up in board meetings, product roadmaps, investor conversations, and regulatory agendas. As momentum accelerates, the conversation has shifted from whether tokenization will happen to a more pragmatic question:  

Are asset managers’ operating models and systems truly ready for tokenized products at scale?  

This isn’t really a question about blockchain networks or smart-contract tooling. It is an infrastructure question. Private markets assets tokenization takes traditionally illiquid assets – private credit, real estate, private funds, infrastructure, even specialized strategies – and expresses them as digital tokens. These digital tokens are then   faster to trade,  quicker to settle, easier to fractionalize, and be distributed across new investor channels.  

In this series, we focus on institutional tokenization of private markets assets – typically delivered through permissioned or enterprise-grade tokenization platforms, rather than fully open, retail-focused crypto markets.  

Where Opportunity Lies 

The upside is obvious. Done well, tokenization can unlock more liquidity, broaden access beyond a small set of large LPs, enhance collateral mobility for financing, and support new digital distribution models. Market estimates suggest that the value of tokenized real-world assets on-chain has already exceeded roughly $24–30 billion in 2025 (excluding stablecoins), after growing several-fold since 2022, and that distributing tokenized alternative strategies to individuals could ultimately unlock on the order of $400 billion in annual revenue for managers and distributors. Tokenized Treasuries and money-market exposures now account for a large share of this activity. Private-credit funds and SPV-based note structures together emerging as one of the largest and fastest-growing RWA segments as institutional and crypto-native investors converge on similar instruments.  

This scale of opportunity explains why many boards now see tokenization as a key lever for the next decade of growth in private markets. Momentum is no longer confined to crypto-native experiments. Major banks, custodians, and asset managers are issuing tokenized money-market funds, Treasuries, and liquidity strategies. Typically, these  operate on permissioned or private blockchains, to improve collateral mobility and settlement efficiency. Specialist platforms are tokenizing private-credit vehicles for institutional and digital-asset investors. Central-bank researchers, including at the Federal Reserve Bank of New York, are studying tokenized investment funds as a serious extension of existing fund structures rather than a sideshow.  

The Full Picture 

At the same time, industry surveys* from market-infrastructure providers show a clear shift from proof-of-concept to early production, particularly in North America and Europe. Asia-Pacific is also accelerating, supported by regulatory sandboxes and emerging digital-asset frameworks. Those same surveys flag that regulatory uncertainty, security risks, and infrastructure limitations are now the top three barriers to scaling tokenized offerings. In other words, bottlenecks are increasingly inside firms’ operating models, not in the technology itself.  

It is tempting to think of tokenization as a clean break from legacy infrastructure. In practice, almost everything that matters in private markets stays the same. A tokenized private asset still needs a legal structure with traditional offering documents, a valuation and NAV process, investor servicing, KYC/AML, tax and reporting, and oversight from risk, compliance, and internal audit under familiar regulatory regimes.  

What tokenization introduces is an additional layer. Ownership is represented as digital tokens on a ledger. Lifecycle events such as subscriptions, transfers, redemptions, collateral pledges, and distributions can now originate either on-chain or off-chain. Smart contracts can be used to encode fees, lock-ups, waterfalls, or vesting rules. Your existing architecture – OMS, PMS, IBOR/ABOR, transfer agency, registry, general ledger, data warehouse and reporting stacks – must now understand, store, and reconcile token events and positions alongside traditional ones.  

Tokenization does not replace your books and records; it adds another ledger and distribution channel that must be integrated and controlled. For most managers, that quickly turns tokenization into an infrastructure stress test – the one no private markets firm can really skip – rather than a standalone innovation project. Move too fast without the right infrastructure and you invite operational and regulatory risk. If you want to avoid that, get in touch and we’ll walk you through what a tokenization-ready model looks like for your firm. 

*McKinsey – “Tokenization of Global Assets”

KPMG – “Digitizing Alternative Funds”

AIMA – “Tokenized Funds: Operating Model Implications”

DTCC – “Realizing the Digital Asset Opportunity: Beyond the Hype”

IOSCO – “Decentralized Finance & Digital Asset Risks”

Financial Stability Board – “Tokenized Markets: Stability Considerations”

Federal Reserve Bank of New York – “Tokenized Funds Research”

Oliver Wyman – “Institutional Tokenization: Infrastructure Requirements”