Author: Jeanne Sun, CFA

The commercial value of a tokenised fund isn’t unlocked by technology alone—it is crystallized through distribution. A well-designed tokenisation strategy without a clear distribution model risks becoming a technical showcase rather than a scalable product. As tokenised funds progress from pilot to production, asset managers face a critical question: How can these tokens reach the right investors and liquidity venues?

Across the market, several dominant approaches are emerging. While not exhaustive, they highlight how tokenisation is being translated into real-world adoption. These models are not mutually exclusive—most firms begin with the approach that reflects their legacy distribution footprint, then expand into adjacent areas. Increasingly, convergence is visible: retail platforms linking to bank networks, and institutional products appearing within DeFi native ecosystems.

Institutional Upgrade

A growing number of firms are integrating tokenised products into bank grade institutional infrastructure—including custody, transfer agency, and collateral—by aligning with the utility functions financial institutions already rely on. BlackRock’s BUIDL illustrates this clearly: issued via Securitize, custodied by BNY Mellon, and now accepted as collateral on Binance.

UBS has taken a comparable path with uMINT, distributed through regulated partners such as DigiFT in Singapore. JPMorgan’s Tokenised Collateral Network further demonstrates how tokenised MMFs can move near-instantly as collateral between banks, replacing legacy settlement cycles with real-time mobility.

This approach aligns strongly with institutional priorities such as capital efficiency, interoperability, and operational resilience. It does require close coordination with established liquidity rails and collateral networks, but for firms with strong institutional relationships, it can unlock significant scalability and credibility.

Retail & Wealth Democratisation

In the retail and wealth segment, several distribution pathways are emerging. 

1) One approach involves direct‑to‑investor applications built by asset managers themselves, such as Franklin Templeton’s Benji app, which provides access to its OnChain U.S. Government Money Fund across Stellar, Polygon, Base, and BNB Chain, and WisdomTree’s Prime and Connect platforms, which bring tokenised funds, stablecoins, and digital assets into a single unified interface.
2) A second pathway focuses on tokenised alternative assets made available through specialist platforms, with players like Securitize offering tokenised feeder funds into private equity and private credit strategies, lowering minimums for individuals. 
3) A third pathway centres on existing broker‑dealer and wealth channels, where integrations with emerging wallet infrastructure—across platforms like Coinbase, Robinhood, Schwab, and others—may ultimately allow tokenised funds to sit alongside traditional equities and ETFs within familiar retail user interfaces. 

These pathways reflect how retail and wealth access may evolve as tokenised products move closer to mainstream portfolios. While approaches range from manager‑led app to integrations with specialist platforms and established broker‑dealer interfaces, the common thread is the drive toward lower‑friction access, familiar investor touchpoints, and incremental expansion of tokenised offerings within existing distribution ecosystems.

As wallet infrastructure matures and more platforms enable custody of tokenised assets alongside traditional holdings, this segment has the potential to broaden participation meaningfully—provided the experience remains intuitive, consolidated, and aligned with how retail investors already navigate their investments.

DeFi Integration

Another emerging model distributes tokenised funds through crypto-native venues, where composability, liquidity incentives, and collateralisation drive user adoption. Digital-native investors encounter tokenised treasuries and MMFs within lending markets, DEX pools, structured on-chain strategies, and CEX margin environments.

Ondo Finance’s USDY launched on Sei to address DeFi liquidity needs while preserving a regulated, yield-bearing structure. Similarly, BUIDL’s acceptance as collateral on Binance demonstrates distribution via utility: professional users can deploy BUIDL as margin while earning MMF-like yield, blending institutional-grade assets with DeFi adjacent trading behaviour. 

This model provides organic reach, composability advantages, and embedded utility, elevating tokenised funds into core building blocks within on chain finance. While it involves navigating regulatory and technical complexities, the potential upside includes access to fast-growing ecosystems and differentiated investor segments.

Summary

Distribution strategy is the point where tokenisation becomes a business rather than just a technological exercise. The firms that gain traction will align their distribution capabilities with the segments they intend to serve—treasury specialists for institutional rails, teams focused on developing and supporting the evolving retail and wealth investors, and crypto‑native business development for DeFi—supported by a unified compliance and reporting backbone.

As the market evolves, new distribution pathways will emerge. The key question for asset managers is not whether to engage, but how to design a distribution strategy capable of scaling across diverse segments and adapting as tokenisation matures.

Disclaimer: The views expressed in this article are solely those of the author and do not represent the opinions, advice, or official position of EY or any of its affiliates.