Why Wall Street’s latest tokenisation rush will fail without market readiness
Written by Mike Foy, CFO, Amina Bank
Five years ago, a tokenised gold product was created in the Swiss mountains by linking digital tokens directly to gold bullion stored in the refineries. It was a clean concept: the gold never left the refinery — the most secure place imaginable — and thus also eliminated transport costs, reduced carbon emissions and addressed the classic investor dilemma of storage. Through fractionalisation, investors could buy as little as one gram with built-in custody. And to balance the digital and physical sides, holders could redeem tokens for actual gold bars.
This project failed
It was, on paper, the perfect hybrid model: ESG-friendly, secure, flexible and efficient. It solved the hard infrastructure questions of custody and redemption. Yet adoption never took off: traditional gold buyers rejected the digital wrappers, and crypto investors ignored gold as an asset class. The product was interesting, but the market wasn’t there. The lesson was clear: providing infrastructure alone doesn’t guarantee adoption. Tokenisation only works when paired with market readiness.
The truth about tokenisation: it can’t be solved by code
If the gold experiment — which has since caught a second wind as the AMINA Gold Token (AGT) -taught us anything, it’s that infrastructure is necessary but not sufficient. Today, the core challenge is aligning blockchain’s 24/7 operating model with legacy finance’s Monday-Friday framework, where settlement can often take days, and the mismatch can be stark. Take the weekend pricing problem. A stock closes at $100 on Friday. Its tokenised version trades on chain on Saturday. What’s the reference price? Officially, still $100. But weekend trades introduce speculative signals about Monday’s open, creating distortions that can ripple back into traditional markets. Without reliable mechanisms for price discovery, tokenised assets risk amplifying volatility instead of reducing it. Liquidity management is another unsolved pain point. Crypto trades around the clock, so demand exists for constant access. But what happens when the underlying reference market is closed? Layer onto that the human element of compliance officers, risk managers and back-office teams that simply aren’t structured for 24/7 monitoring. Technical progress is worth celebrating, but these are the operational realities that will decide if tokenisation will remain frustratingly stuck between blockchain’s capabilities and TradFi’s constraints. And the truth is, if forcing weekend trading onto assets designed for business hours creates chaos instead of efficiency, is 24/7 trading really a compelling feature?
Where the real value lies
Luckily, the industry is moving past low-value pilots that add little beyond novelty, such as tokenised single stocks. The real opportunity lies in illiquid, high-value asset classes where blockchain can remove systemic barriers to entry. Private equity, commercial real estate and infrastructure projects can democratise access, allowing smaller investors into pools once reserved for institutions. For stablecoin holders, tokenised real-world assets create on-chain yield opportunities that expand the financial toolkit. As McKinsey projects, tokenised private markets could grow into a $4 trillion market by 2030. Indeed, Larry Fink CEO of the world’s biggest asset manager, Blackrock, recently said: “Tokenization is inevitable. $4.1trillion already sits in digital wallets.” Breaking a $1,000 share into $100 tokens is cosmetic. The true innovation is in programmable structures that enable new financial products: automated yield strategies, cross-border settlement rails, and even on-chain credit systems. Tokenisation’s value isn’t in digitising the old, but in designing what was never possible before.
Regulation as the catalyst, infrastructure as the unlock
In any case, there is progress. In the US, legislative proposals such as the GENIUS Act have already introduced the first serious framework for stablecoins and, coupled with the potential passing of the CLARITY Act, are both beginning to provide the compliance frameworks that institutions need. Clear rules reduce risk and encourage capital inflows, but regulation alone won’t deliver scale. Tokenisation will succeed only if regulation and infrastructure evolve together. Regulation provides guardrails. Infrastructure offers the rails themselves. Together, they allow tokenisation to move beyond pilots and finally achieve mass adoption. The future of tokenisation won’t be defined by the flashiest products but by the patient work of solving liquidity mismatches and building operational resilience. The firms that focus on the quiet, foundational problems will be the ones that truly redefine finance’s next chapter.
PwC estimates the global funds industry in 2024 was $139trillion will grow to over $200 trillion by 2030, has been built on post-war mutual fund growth, 1980s retirement plans, index innovation, and ETF/digital access. Reality funds potentially face existential disruption. Tokenisation is shattering the old model: public and private equities, debt, real estate and credit now trade 24/7 with weekly pay-outs whereby slashing administration, custody and compliance costs that once justified fund fees. Merrill Lynch estimates that younger investors, set to inherit over $124trillion by 2048, demand mobile-first, impact-driven and AI-customised portfolios, diversified across tokenised assets without brand loyalty or fund wrappers. In the UK, where £10 trillion in funds are managed (half overseas-held), many ignore CGT allowances tied to pooled structures. This shift creates winners: stock pickers training AI bots, market makers trading expanded tokenised assets and exchanges such as LSE’s Digital Market Infrastructure and Nasdaq’s tokenised securities (SEC-approved for 2026). Traditional asset managers must tokenise funds, embrace mass customisation or watch capital flow directly to on-chain assets. The future isn’t pooled funds, it’s programmable, personalised — and relentlessly efficient.
Any references to AMINA or AMINA Gold Token (AGT) are for information only. Tokenised products can be complex and may not be suitable for all investors. Pricing and liquidity can be affected by market conditions, and you may not be able to sell or exit when you want. Regulatory treatment and product features may change.
Why Wall Street’s latest tokenisation rush will fail without market readiness was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.
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