Key Points
- Major US banks and financial institutions believe digitized finance adoption will begin gradually before accelerating rapidly after reaching a tipping point.
- Traditional financial firms are actively building blockchain and tokenization infrastructure to avoid being left behind if market demand surges.
- Moody’s says tokenized assets could eventually reshape payments, banking, and financial settlement systems across global markets.
Major US banks and financial market intermediaries increasingly believe the transition toward digitized finance and tokenized assets is inevitable, according to a new report from Moody’s Ratings.
The agency said conversations with banking executives and financial infrastructure providers revealed a common expectation that adoption will initially move slowly before eventually accelerating much faster once broader market confidence and infrastructure mature.
Moody’s described the expected transition as “slow, then fast,” with tokenization gradually expanding from simple financial products into broader institutional and mainstream financial markets.
Industry Preparing for Major Structural Shift
According to Moody’s, most large financial institutions are already preparing internally for a future in which tokenized assets, blockchain-based payments, and digital settlement systems become increasingly common across global finance.
The report noted that nearly all major banks and financial intermediaries have established dedicated digital asset teams, blockchain research groups, or innovation divisions focused on tokenization infrastructure.
Many institutions are also participating in pilot programs and blockchain experiments designed to prepare for a potential surge in client demand for digital financial services.
Moody’s said these preparations are strategic rather than speculative, as firms seek to avoid being caught unprepared if adoption accelerates suddenly.
Tokenization Growth Continues Expanding
Tokenization has emerged as one of the fastest-growing areas of institutional blockchain adoption.
The tokenized real-world asset market has expanded sharply in recent years as financial firms explore blockchain-based versions of traditional assets such as Treasury securities, money market funds, private credit, and deposits.
According to industry data referenced in the report, the tokenized real-world asset market has already grown significantly throughout 2026 and now represents tens of billions of dollars in value.
Investment firms and analysts increasingly believe tokenized assets could eventually become a multi-trillion-dollar market if adoption continues expanding across financial services.
Early Adoption Focused on Simpler Financial Products
Moody’s said current tokenization activity remains concentrated in relatively simple areas such as stablecoins, short-term instruments, cross-border payments, and selected institutional settlement use cases.
For now, most tokenized financial activity still operates alongside traditional banking infrastructure rather than replacing it entirely.
However, industry participants believe broader adoption could accelerate once legal frameworks, operational systems, and institutional confidence improve further.
The report emphasized that uncertainty no longer centers on whether tokenization will happen, but rather how quickly it will scale and which market segments will adopt it first.
Three Possible Futures for Financial Markets
Moody’s outlined three potential long-term scenarios for the future of tokenized finance.
The agency’s primary expectation is a “steady growth” scenario in which tokenization expands gradually while traditional financial institutions maintain central roles within the system.
Under this outcome, tokenized deposits, stablecoins, and blockchain settlement systems would coexist with conventional financial infrastructure for many years.
A second scenario envisions slower adoption caused by regulatory uncertainty, legal challenges, and weak end-user demand, limiting tokenization to niche financial applications.
The third and most disruptive possibility involves rapid tokenization growth that significantly reshapes financial markets, settlement systems, and banking infrastructure.
Stablecoins and Onchain Settlement Could Pressure Banks
Moody’s warned that widespread adoption of stablecoins and blockchain settlement systems could eventually pressure some traditional financial institutions.
Correspondent banks, payment processors, and parts of legacy settlement infrastructure could lose revenue if blockchain systems reduce delays and eliminate certain intermediaries from financial transactions.
Smaller banks could also face pressure if consumers and businesses increasingly shift balances toward tokenized financial products and blockchain-based payment systems.
Wall Street Continues Expanding Crypto Operations
The report comes as several major financial institutions continue expanding their digital asset operations.
Morgan Stanley recently appointed veteran executive Amy Oldenburg to lead its crypto division following earlier plans to expand crypto-related investment products and digital asset services.
Other global banks, asset managers, and payment companies have similarly accelerated blockchain development as institutional demand for tokenized financial infrastructure continues growing.
Tokenization and AI May Converge
Some investors and analysts believe tokenization may eventually play a critical role in powering artificial intelligence-driven financial systems.
Macro investor Jordi Visser recently argued that tokenized assets and blockchain payments could become essential infrastructure for autonomous AI agents that require digital financial systems capable of operating without traditional banking intermediaries.
Meanwhile, international organizations such as the International Monetary Fund have acknowledged that tokenization could improve transparency and reduce friction in financial markets, while also warning that rapid adoption may introduce new financial stability risks.
As regulatory frameworks evolve and institutional participation grows, tokenization is increasingly shifting from a niche blockchain concept into a potentially transformative force across global financial markets.
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