Tokenization advocates often point to faster settlement, around-the-clock trading and using the tokens in decentralized finance (DeFi) as the biggest advantages of bringing traditional assets onto blockchain rails.
Thomas Sy, head of multi-asset solutions at New York Life Investment Management (NYLIM), said in an interview with CoinDesk that the technology's biggest opportunity lies elsewhere: rebuilding how investment portfolios are constructed.
The executive, whose team oversees about $11 billion within the $807 billion asset management arm of insurer New York Life, said blockchains could eventually allow asset managers to craft tailored portfolios to individual investors at a scale, something that today's financial system cannot.
"We believe that the future of asset management is going to be customization," Sy told CoinDesk. "The only technology that can help us get there at scale is the blockchain."
His view highlights a less-discussed use case for tokenization as Wall Street's blockchain efforts accelerate. Banks, asset managers and market infrastructure firms are increasingly issuing tokenized versions of money market funds, private credit and equities, betting that blockchain can modernize financial plumbing. The market for tokenized real-world assets could reach $5.5 trillion by 2030 from the current $30 billion, Citi projected.