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Industry leaders at Fed panel: tokenization can bridge TradFi and crypto if legal rights and custody are clear
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Summary
Executives from Franklin Templeton, DRW, BlackRock and JPMorgan told a Federal Reserve‑hosted panel that tokenization can increase efficiency and enable new products but stressed the need for clear legal entitlements, custody arrangements and interoperable market utilities before broad institutional adoption.
Colleen Sullivan, co‑head of Ventures at Brevin Howard Digital, moderated a Federal Reserve‑hosted panel in which senior executives from major asset managers and market firms described practical examples of tokenized products and urged clarity on legal rights and custody.
Jenny, CEO of Franklin Templeton, described a tokenized money market fund launched in 2020 that is natively on chain and calculates intraday yield. "If a hedge fund owns it for 4 hours, 22 minutes, and 36 seconds, you will actually get the yield for that amount of time," she said, noting lower minimums and faster settlement enabled by on‑chain recordkeeping. Rob Goldstein, BlackRock’s chief operating officer, pointed to tokenized ETFs and funds as evidence of institutional demand, citing the panel’s figure of roughly $90,000,000,000 in assets for an iBit ETF example used during discussion.
Don Wilson, founder and CEO of DRW, described an on‑chain U.S. Treasury repo pilot in which DTCC placed repo transactions on a blockchain. "All the transactions were atomic," he said, adding that stablecoins were used for cash legs and that privacy was preserved on the Canton ledger so only relevant participants saw transaction details. Panelists said these pilots demonstrate reduced intermediary risk when established clearing agencies play tokenization‑agent roles.
Panelists emphasized that the term tokenization covers a range of structures, from synthetic instruments that provide price exposure without full legal ownership to native on‑chain issuances where the token itself represents the security. "Tokenization means different things to different people," Sullivan said, and several speakers urged regulators and market utilities to ensure token products carry the same legal rights and entitlements as their underlying traditional counterparts.
Speakers also noted practical benefits from moving recordkeeping and settlement onto chain: a single source of truth that eliminates manual reconciliation, programmable smart contracts that enable atomic settlement, and payment rails that operate 24/7. At the same time, they cautioned that not all token types should be treated identically: tokenized bank deposits, stablecoins and tokenized treasury or fund units have distinct risk profiles and may merit different market treatments and haircuts when used as collateral.
The panel closed with agreement that a hybrid transition is most likely: some use cases will move quickly to on‑chain models while others will remain in legacy markets until interoperability and legal frameworks mature. Colleen Sullivan thanked the panelists and the Federal Reserve for hosting the discussion.
