DIGITAL MONEY AND TOKENIZED ASSETS

Fractionalization

Dividing a high-value asset into smaller, tradeable units via tokenization, reducing minimum investment thresholds and enabling broader distribution of previously illiquid or wholesale-only asset classes.

EXAMPLE

Fractionalization of a $50M private credit facility into $1,000 tokens allows wealth management platforms to offer exposure to institutional-grade credit within retail-friendly minimums.

Relevant Roles and Functions

On-chain Role
Digital Asset Markets
Head of Tokenization
Function
Digital Securities Infrastructure
Tokenized Bond
Tokenized Funds
Tokenized Treasuries
TradFi Equivalent
Asset Servicing / Custody
Capital Markets
Securities Issuance
Structured Products

Related Terms

Tokenization

The process of representing ownership rights to a financial or physical asset as a digital token on a blockchain, enabling programmable transfer, fractionalization, and 24/7 settlement without traditional intermediaries.

Example

J.P. Morgan's Kinexys platform uses tokenization to enable intraday repo settlement of money market fund shares as on-chain collateral.

Real-World Asset

A traditional financial or physical asset—such as a government bond, real estate, private credit facility, or trade receivable—that has been tokenized and represented on a blockchain for on-chain trading, settlement, or collateral use.

Example

BlackRock's BUIDL fund tokenizes U.S. Treasury exposure, allowing institutions to use the token as real-time on-chain collateral instead of wiring cash.

Tokenized Security

A traditional financial instrument—equity, bond, or fund unit—represented as a digital token on a blockchain, with ownership rights, transfer restrictions, and corporate actions managed by smart contract logic.

Example

Franklin Templeton's FOBXX tokenized money market fund distributes dividends automatically via smart contract, eliminating the fund administrator's manual allocation process.

Liquidity Pool

A smart contract that holds reserves of two or more assets, enabling decentralized trading, lending, or borrowing. Participants who deposit assets earn a share of fees proportional to their contribution.

Example

An institutional liquidity pool for tokenized government bonds enables real-time repo without requiring a central dealer to intermediate each trade.