Wall Street Quietly Rebuilds Crypto Stack Through Tokenization and Custody

Traditional finance giants are reshaping the crypto landscape under the banner of tokenization, with $8.3 billion in tokenized treasuries now on-chain. Goldman Sachs, BNY Mellon, and Citi have taken decisive steps—launching tokenized money market funds, acting as tokenization agents, and integrating blockchain into fund administration. This marks a strategic pivot from defensive posturing to infrastructure adoption.

The focus on money market funds reveals institutional priorities: low volatility and systemic relevance. These short-term debt instruments serve as a bridge between traditional balance sheets and blockchain rails, offering cash management solutions that resemble BNY Mellon's LiquidityDirect more than crypto exchanges.

BlackRock's bet on tokenized funds as Core products alongside ETFs underscores the sector's maturation. The real competition lies not in current volumes—where real-world assets range between $24-$30 billion—but in custody solutions for the next $100 billion of digital paper.