Tokenization's trillion-dollar hype is fine — Wall Street's plumbing, not so much 🚽

The former co-founder of 21Shares, Ophelia Snyder, said the crypto industry and traditional finance remain misaligned on what it actually takes to bring tokenized assets to institutional scale. Speaking on CoinDesk's Public Keys with Jennifer Sanasie, Snyder said tokenization delivers clear improvements to settlement rails and the movement of assets, but the harder problem sits downstream, in how blockchain-based assets plug into the existing infrastructure of banks, brokerages and asset managers.

Snyder said blockchain developers have largely solved transaction throughput, yet the broader operational needs of financial institutions remain unresolved. Open questions include how tokenized assets will fit into books-and-records systems, compliance workflows and regulatory reporting, and how risk-management frameworks will adapt to instruments that can trade around the clock. Many institutions also depend on third-party software vendors whose systems have not yet been updated for blockchain-native transactions.

Scale, not functionality, is the industry's biggest hurdle, according to Snyder. "A billion dollars is nothing when it comes to traditional financial flows," she said. Moving large volumes of digital bearer assets on behalf of clients would require significantly more oversight and controls than today's book-entry arrangements, and Snyder noted that a tokenization deployment that works at a limited size can still buckle under the volume of U.S. capital markets.

Snyder outlined two paths forward. Financial institutions could build new software designed from the ground up to integrate blockchain infrastructure with existing controls, or incumbent software providers could adapt their products to support new transaction methods. Both routes would carry long implementation timelines, particularly because many institutions are still completing cloud migration efforts.

Snyder expects the next phase of work to focus on whether tokenized infrastructure can operate in the critical path of major financial firms, beyond pilot programs. She said the pace of meaningful implementation over the coming years will depend largely on how aggressively institutions choose to pursue adoption.