Tokenization Builds Banks New Empires Instead of Killing Them

Tokenization is a technology aimed at disintermediation. The act of migrating assets onto a blockchain, not the tokenization that underpins card security. Tokenizing a real-world asset means that the traditionally costly machinery standing between buyer and seller can disappear.

As tokenized finance moves from demonstration projects toward institutional infrastructure, however, banks, stablecoin issuers, exchanges and market operators are discovering that while tokenization may shrink the machinery behind many financial transactions, the functions behind that machinery are proving harder to eliminate.

“Tokenization is a technological enabler, not a determinant of institutional design,” the International Monetary Fund (IMF) said in April.

Over the summer, the IMF published research examining the issue. It said blockchain may automate substantial portions of issuance, clearing, settlement and reporting, while leaving intact the need for accountable institutions capable of exercising judgment and managing stress.

Firms such as stablecoin issuers, whether crypto-native or TradFi, are not simply software companies that have minted an asset-backed token. These firms must become financial intermediaries responsible for reserves, compliance, redemption, distribution and operational resilience.

See also: Why Stablecoins Are a Money Story, Not a Consumer Story

Tokenization Won’t Kill Financial Intermediaries; It’s Creating New Ones

Tokenization exposes the fact that some friction exists because markets need it. Instant atomic settlement can eliminate the period in which one party has delivered an asset but has not yet received payment. That reduces settlement and counterparty risk, but it also removes time.

Tokenization may make settlement programmable. It does not make liquidity programmable into existence.

Today, market participants can use settlement windows to obtain funding, net obligations and move collateral before payments become final. Under instantaneous settlement, the necessary cash or securities may need to be available immediately. That creates a potentially valuable new intermediary layer around tokenized liquidity: firms that optimize collateral, provide intraday financing, connect tokenized assets with conventional cash, or supply the liquidity required for atomic transactions to complete.

The Bank for International Settlements reached a related conclusion. Its 2026 work on a next-generation monetary system envisions tokenized central bank reserves, commercial bank money and financial assets operating through integrated ledger architecture rather than replacing the two-tier banking system altogether.

“Today, stablecoins are like a drug trying to treat 20 different problems,” Prajit Nanu, founder and CEO of real-time payments firm Nium, told PYMNTS in July.

“Where we see a significant amount of opportunity is stablecoin not as a payments value, but as a settlement value,” he said. “Where we think stablecoin has the biggest value … is a treasury layer across all the entities, where I can move money instantly among my entities.”

Meanwhile, JPMorganChase, Bank of America, Citigroup, Wells Fargo and other large institutions are working through The Clearing House on a shared tokenized-deposit network that is expected to connect traditional banking rails with blockchain infrastructure. The planned system would allow bank deposits to move around the clock while remaining liabilities of regulated commercial banks.

Wells Fargo reportedly also hopes to launch tokenized deposits for commercial customers this fall.

Read also: Banks Make Deposit Defense Their Best Offense in Crypto Battle

The Biggest Prize in Tokenized Finance Is the Infrastructure, Not the Asset

Tokenization can remove reconciliation, automate workflows and compress settlement chains. Even BlackRock CEO Larry Fink has gone on record alleging that all assets should be tokenized on a blockchain and tradable online, writing in his 2025 annual shareholder letter, “Every stock, every bond, every fund—every asset—can be tokenized.”

Rather than blockchain simply routing around the incumbent post-trade system, major financial institutions are putting tokenization inside it. A Depository Trust and Clearing Corporation initiative announced this summer includes participants such as JPMorgan, Goldman Sachs, BlackRock and the New York Stock Exchange and is designed to represent conventional securities—including equities and Treasurys—on blockchain infrastructure while preserving the underlying legal ownership structure.

Still, what tokenization cannot eliminate is the basic institutional problem finance has always had to solve. Somebody must be trusted to define the rules, honor the liabilities and remain standing when markets stop behaving normally.

At the same time, “Waiting for Certainty: Why Most CFOs Are Holding Back on Crypto and Stablecoins,” the March installment of PYMNTS Intelligence’s 2026 Certainty Project, showed that most middle-market companies remain cautious about digital assets. Usage is limited, with 13% of firms using stablecoins and 5% employing other cryptocurrencies.

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