Fidelity’s Lai says tokenized funds’ long-term edge is balance sheet management

Fidelity International’s Giselle Lai said the strongest long-term institutional use case for tokenized assets is balance-sheet management rather than round-the-clock liquidity alone. Speaking at the WebX conference in Tokyo, Lai said global institutions often spread cash across multiple bank accounts to meet regulatory requirements and manage currency risk, even though many of those deposits generate little or no return. Tokenized products that can generate yield 24 hours a day could improve that process by giving institutions a more efficient way to manage liquidity and balance sheets. Lai said investors are not looking for tokens for their own sake, but for what tokenized products can do better than existing tools, particularly in making asset management faster and cheaper. She identified tokenized money-market funds backed by US Treasuries as the fastest-growing segment of the market. Since BlackRock’s BUIDL fund launched in March 2024, assets in that segment have risen above $15 billion. The broader on-chain real-world asset market, excluding stablecoins, is valued at more than $31 billion, while the global asset-tokenization market, including alternative investments and tokenized financial infrastructure, is estimated at about $2.1 trillion. She also said tokenization will take time to mature into a full balance-sheet management tool, drawing a comparison with the ETF industry, which took nearly 20 years to develop a comprehensive ecosystem.