Tokenisation of ETFs: a new frontier for asset management?

Over the last ten years, the financial industry has been speeding towards digital transformation, with blockchain, decentralised finance (DeFi) and real-world-asset (RWA) tokenisation transforming the way value is stored and transferred. Asset tokenisation has been the most rapidly expanding in these changes with the tokenised RWA market exceeding $24 billion in 2025, fuelled by tokenised US Treasuries and money-market funds as well as private credit. With the global ETF market exceeding the above asset holding under management, it has emerged as the next major frontier for institutional-grade tokenisation. Exchange-traded funds (ETFs), the instruments of diversification and passive investment holding over $16 trillion in assets across the globe, have become a prime example in 2025. According to PMH Capital’s post on ‘X’, $605billion was recorded in global outflows from active equity funds and $1.4T inflows into passive ETFs. Over the past 10 years, active funds lost $3.1T whilst pass…