Balance Sheets Over Buzz: Fidelity Exec Says Tokenization's Real Flex Is Cash Management 💼

Fidelity International's Giselle Lai said the most compelling long-term use case for tokenized funds is balance-sheet management for large global institutions, not the 24/7 liquidity narrative most often pitched to crypto markets. "I think over time, the more appealing use case will be balance sheet management," Lai, a director and digital assets strategist for APAC at Fidelity International, said in an interview at the WebX conference in Tokyo.

Lai pointed to the operational challenge facing pensions, insurers and multinational corporates that must hold cash across multiple bank accounts to meet regulatory requirements, manage currency exposure and satisfy liquidity demand. Those deposits frequently earn no return, and moving balances between jurisdictions in a timely manner remains cumbersome. Tokenized instruments, she said, can move efficiently, earn yield around the clock and integrate with broader liquidity needs, offering "a more efficient use case if they are able to have more 24/7 bearing instruments to manage their balance sheet."

Lai cautioned that building out a comprehensive tokenized balance-sheet ecosystem will take decades rather than quarters. Tokenized products already exist, though primarily for investing, with tokenized money market funds, mostly backed by U.S. Treasuries, leading the category. BlackRock's USD Institutional Digital Liquidity Fund (BUIDL) debuted in March 2024 and is the largest such product.

Tokenized money market funds now hold more than $15 billion in assets under management, while the broader onchain real-world asset market, excluding stablecoins, has surpassed $31 billion in value. Casting a wider net to include alternative investments and tokenized financial infrastructure, the global asset tokenization market is valued at roughly $2.1 trillion, according to forecasts cited in Fidelity's reporting.