POLICY BRIEF article
Front. Blockchain
Sec. Blockchain Economics
Tokenization and the Reshaping Traditional Finance: Institutional Adoption
Provisionally accepted
- The Brattle Group, Boston, United States
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This paper examines the growing institutional adoption of tokenization. Drawing on examples such as BlackRock's BUIDL fund, we show how traditional financial institutions are experimenting with blockchain-based issuance, settlement, and custody models. We also outline the lifecycle of a hypothetical tokenized bond and demonstrate how it employs smart contracts and data oracles at each stage of the process. The paper contributes to current discussions by explaining how tokenization interacts with existing financial infrastructure and by identifying areas in which tokenization may influence market structure and regulation.
Keywords: Blockchain, Digital assets, Distributed Ledger Technologies, Financial market infrastructure, Institutional finance, regulatory framework, Smart contract, tokenization
Received: 15 Nov 2025; Accepted: 22 Jan 2026.
Copyright: © 2026 Donmez, Dave and Gkatzimas. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Anil Donmez
Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.