Yasuda on Tokenization

• State Street's entry as the inaugural third-party custodian on JPMorgan's digital debt platform marks a watershed moment for institutional tokenization. The platform successfully processed a $100 million commercial paper transaction by OCBC, demonstrating that blockchain-based securities settlement has moved from pilot to production scale. This collaboration between two of the world's largest custodians—State Street managing $43 trillion in assets and JPMorgan controlling $3.2 trillion—signals that digital securities infrastructure has achieved the reliability and scale demanded by institutional markets.
• The significance extends beyond a single transaction. With State Street among the leading custodians in our industry ecosystem, this partnership validates the tokenization platforms' thesis that traditional financial infrastructure can seamlessly integrate blockchain technology. JPMorgan's platform eliminates manual settlement processes entirely, handling digital cash settlement automatically—a capability that reduces operational costs by an estimated 30-50% according to industry studies. The involvement of OCBC, a major Southeast Asian bank, also demonstrates the global reach of tokenized securities platforms.
• For wealth managers and fund innovators, this development represents a clear pathway to offering clients tokenized products with institutional-grade custody and settlement. The State Street partnership removes a critical barrier—custody concerns—that has prevented many traditional advisors from exploring digital asset offerings. Fund managers can now structure tokenized products knowing that established custodial relationships remain intact while gaining the benefits of 24/7 settlement and programmable compliance features.
• Watch for additional major custodians to join JPMorgan's platform in the coming months, as competitive pressure mounts to offer clients digital settlement capabilities. The next logical expansion involves European and Asian custodians, particularly as regulatory frameworks like MiCA in Europe create standardized approaches to digital asset custody. This could accelerate tokenization adoption across private credit, real estate, and alternative investment funds throughout 2025.

Hong Kong's Stablecoin Framework Triggers $3.75 Billion Investment Surge as Asia Challenges US Digital Asset Dominance

• Hong Kong's implementation of the world's first comprehensive stablecoin ordinance on August 1 has catalyzed unprecedented institutional activity, coinciding with record $3.75 billion weekly inflows into digital asset investment products. The regulatory framework requires full collateralization with liquid assets under oversight from both the Securities and Futures Commission and Hong Kong Monetary Authority, providing the legal certainty that institutional investors have demanded. This regulatory clarity has triggered a surge in real-world asset tokenization interest as mainland Chinese institutions redirect resources toward blockchain-based product development.
• The timing proves strategic for Asia's broader digital asset ambitions. While the US captured 99% of the $3.75 billion investment flows, Hong Kong's regulatory framework positions it to compete directly with established crypto investment jurisdictions. The stablecoin ordinance enables stablecoin issuers like Circle and Tether to operate within a clear legal framework, while wealthy Asian investors increasingly allocate to digital assets, with Hong Kong's HashKey Exchange reporting 85% year-over-year account growth. South Korean exchanges similarly saw 17% trading volume increases, suggesting coordinated regional adoption.
• For international fund managers, Hong Kong's framework creates new structuring opportunities for Asia-focused tokenized products. The regulatory clarity enables fund domiciliation in Hong Kong while maintaining access to Chinese institutional capital—a combination previously unavailable in digital assets. Wealth managers with high-net-worth Asian clients should consider Hong Kong-structured tokenized funds as a way to offer digital asset exposure while meeting fiduciary standards. The framework particularly benefits managers of private real estate and infrastructure funds seeking Asian institutional capital.
• Expect additional Asian jurisdictions to implement similar frameworks by early 2026, as regulatory competition intensifies. Singapore and South Korea are already developing comparable approaches, while South Korea's planned October stablecoin legislation suggests coordinated regional strategy. This could shift significant digital asset investment flows from US to Asian markets, particularly for products targeting Asian institutional investors.

Emerging Markets Pioneer Practical Crypto Applications While Developed Markets Focus on Investment Products

• Pakistan's announcement of a strategic Bitcoin reserve alongside 2,000 megawatts of electricity allocation for Bitcoin mining exemplifies how emerging markets are implementing cryptocurrency for practical economic purposes rather than pure investment speculation. Minister Bilal bin Saqib's initiative leverages Pakistan's energy surplus to generate sovereign digital assets while serving the country's 40 million crypto wallet holders. Similarly, Thailand's launch of TouristDigiPay, enabling crypto-to-baht conversion for tourists, demonstrates real-world utility applications that generate immediate economic value through increased tourism spending.
• This contrasts markedly with developed market focus on investment products. While the US sees crypto companies rushing to IPOs amid a $4.2 trillion global crypto valuation, emerging economies are building infrastructure for practical adoption. Indonesia's comprehensive tax framework reclassifying crypto as securities provides regulatory clarity for business use, while Vietnam's new digital technology law formally recognizing cryptocurrencies targets a market where 20.3% of the population already owns cryptocurrency. Ghana's upcoming licensing framework for crypto exchanges will regulate over $3 billion in annual transactions serving 3 million users.
• For global investment managers, emerging market crypto adoption creates new opportunities beyond traditional digital asset funds. The practical applications—from remittances to tourism payments to energy monetization—suggest sustainable demand drivers that could outperform speculation-driven markets. Managers should consider exposure to companies serving these practical use cases, potentially through tokenization platforms like those in our industry ecosystem that can structure emerging market crypto infrastructure investments. The regulatory maturity demonstrated by countries like Indonesia and Vietnam also reduces political risk compared to earlier emerging market crypto adoption.
• Monitor central bank digital currency developments in emerging markets as the next wave of practical adoption. Pakistan's selection of Japanese blockchain developer Soramitsu for CBDC development and the UAE's detailed Digital Dirham implementation plan suggest 2025 will see multiple emerging market CBDC launches that could further accelerate practical cryptocurrency adoption and create new investment opportunities.

• The tokenized money market fund sector experienced its first major stress test in late July and August 2025, with approximately $800 million in outflows across major funds highlighting both the institutional scale and concentration risks inherent in this rapidly growing market. BlackRock's BUIDL fund, the sector's dominant player with $2.9 billion in peak assets, saw $447 million in redemptions over 30 days, while Superstate's USTB experienced $287 million in outflows and Circle's USYC faced $67 million in withdrawals. Rather than indicating sector distress, analysis reveals this was primarily institutional rotation driven by tactical portfolio adjustments from major holders.
• The outflow pattern demonstrates the institutional nature of tokenized Treasury products, with BUIDL held by only 17 addresses despite its multi-billion scale. Ondo Finance, which held approximately 38% of BUIDL's total supply as backing for its OUSG product, emerged as a primary redeemer alongside Ethena Labs, whose USDtb stablecoin held $1.29 billion in BUIDL representing 90% of its reserves. The concentration among large institutional holders created amplified volatility from routine rebalancing activities, while new collateral uses—including Deribit and Crypto.com accepting BUIDL as derivatives collateral—contributed to increased cyclical flows around trading expiries.
• For wealth managers and institutional allocators, this episode provides crucial insights into tokenized Treasury market structure and liquidity dynamics. The ability of major holders to execute large redemptions demonstrates robust operational infrastructure, while capital rotation to other tokenized products—with WisdomTree's WTGXX gaining $165 million in inflows—confirms continued institutional demand for blockchain-based Treasury exposure. Fund managers should consider concentration risk when designing tokenized products, particularly given how few large holders can drive significant volatility in nascent markets.
• The sector's resilience amid this rotation event reinforces long-term growth prospects, with total tokenized Treasury assets exceeding $4.4 billion globally and continued institutional adoption from traditional finance players. BNY Mellon and Goldman Sachs launching tokenized MMF shares in July 2025, combined with Bank of America's projection of $25-75 billion in additional stablecoin demand for T-bills, suggests the July-August outflows represent normal institutional maturation rather than fundamental sector weakness. Expect continued growth with improved distribution across holders as the market develops.

Regulatory Convergence Accelerates as US and UK Open Retail Access While Maintaining Institutional Standards

• The SEC's decision to allow in-kind redemptions for crypto ETFs combined with the UK's confirmation of retail access to crypto ETNs from October 8 demonstrates regulatory convergence toward broader digital asset access while maintaining investor protection standards. The in-kind redemption mechanism, long sought by asset managers, improves ETF efficiency by allowing authorized participants to exchange cryptocurrency directly rather than requiring cash transactions. Meanwhile, the UK's approach categorizes crypto ETNs as "restricted mass market investments" with appropriate risk warnings, balancing accessibility with protection.
• This regulatory evolution reflects growing confidence in digital asset market infrastructure among major financial regulators. The timing aligns with record institutional adoption, as evidenced by the $3.75 billion weekly inflows that drove digital asset AUM to an all-time high of $244 billion. Circle's successful $1.05 billion NYSE debut and subsequent Arc blockchain launch with institutional access through Fireblocks further validates the maturation of digital asset infrastructure supporting both institutional and retail adoption.
• For wealth managers, these regulatory changes create clearer pathways to offer clients digital asset exposure while meeting fiduciary requirements. The in-kind redemption mechanism reduces tracking error for crypto ETFs, making them more suitable for portfolio allocation, while UK retail access to ETNs provides European wealth managers with regulated products for client portfolios. Fund innovators can now structure products knowing that major jurisdictions support both institutional custody standards and broader retail access. The regulatory clarity particularly benefits digital investment managers in our ecosystem developing new product structures.
• Expect additional regulatory harmonization throughout 2025 as jurisdictions compete to attract digital asset business while maintaining investor protection. The EU's MiCA implementation, evidenced by Czech Republic's recent framework adoption, suggests standardized approaches will emerge across major markets. This regulatory convergence should accelerate institutional adoption while enabling retail access through properly structured and regulated products.