With a licensing regime now in law in Australia, a world-first central-bank pilot behind us, and roughly A$3.5 trillion about to change hands, wealth managers need to determine what tokenized structures can now be made possible that traditional ones never could.
The tokenized fund moment has arrived
Tokenized funds and ETFs bring traditional vehicles onto the blockchain, replacing centralised clearinghouses with smart contracts to enable fractional ownership, 24/7 trading and instantaneous settlement. Franklin Templeton proved the model in 2021; BNP Paribas issued tokenized fund shares on Allfunds Blockchain in 2025, and BNY partnered with Goldman Sachs to bring tokenized money market fund shares onto LiquidityDirect the same year. tokenized US Treasuries alone grew from roughly $1.8 billion to $7.5 billion in a single year. While this is a fraction of the $7 trillion money market fund industry, but a fast-growing one.
The proof-of-concept debate is over. The more interesting shift for wealth is what tokenized structures unlock: direct indexing and thematic portfolios, long gated by ticket size, become viable when smart contracts handle rebalancing and tax-loss harvesting at the position level, extending personalisation well beyond the private-banking floor.
Where Australia stands today
Australia has moved from debate to statute. The Corporations Amendment (Digital Assets Framework) Act 2026 brings Digital Asset Platforms and tokenized Custody Platforms under the AFS licensing regime, holding them to the same client-asset, disclosure and custody standards as brokers and fund managers. In parallel, the RBA and DFCRC’s Project Acacia tested 20 wholesale tokenized use cases and issued a world-first pilot wholesale CBDC across public and private ledgers, with the major banks involved. The perimeter is defined and the rails are being built. For private wealth, the competitive question shifts from “if” to who is licensed, custody-ready and connected first.
Issuance is the easy part. Distribution is the frontier.
Issuing a tokenized fund and distributing it are different problems, and most of the conversation addresses only the first. A tokenized fund must still reach investors across jurisdictions with different licensing regimes, eligibility rules and transfer-agent relationships, ie, distribution. This is the gap Calastone and Fireblocks set out to close: Calastone brings the distribution network that asset managers and platforms already trust; Fireblocks provides the custody, tokenisation and settlement layer that lets a fund exist onchain and still move through it. An issuance platform with no distribution is a product with no market; a distribution network with no tokenized settlement layer is still on the old rails.
Ask a corporate treasurer, or a private-wealth client, what they actually want, and it is rarely more tokenized products. It is one screen showing every holding: tokenized fund, stablecoin balance and traditional asset alike.
Tokenized cash and the custody backbone
For wealth, the nearer-term stablecoin use case is cash management, not client yield: a cross-border conversion that takes two days through conventional FX settles in minutes onchain. But a stablecoin earns nothing, and every trip back to fiat is a conversion event. A tokenized money market fund pays a return while the asset stays onchain, which is why cash and fund tokenisation are converging. Once a fund share, a Treasury position or a private-credit holding exists as a token, custody becomes an operational question about every asset on the balance sheet — who holds the keys, how they are segregated, what happens at redemption — governed by exactly the segregation and trust standards Australia’s incoming regime will require. Built to that bar, custody stops being a digital-assets side-project and becomes the operational backbone for the whole book.
The great wealth transfer, and a new kind of client
Australia is entering its largest-ever intergenerational wealth transfer with roughly A$3.5 trillion moving from some five million baby boomers to younger generations over the next two decades, and already underway. It changes who the client is. The inheriting cohort is digital-native, expects a mobile, transparent, always-on experience, and carries higher comfort with digital assets and different risk appetites than the generation that built the wealth. For advisers and private banks this is a retention event as much as an opportunity: inherited assets have historically left the incumbent at the point of transfer. The firms that keep the relationship will be those that can show every traditional and digital asset holding on one screen, settle and report in real time, and let a portfolio reflect the next generation’s values, not just their parents’ risk profile. Experience, transparency and personalisation become the moat.
Where digital assets sit in portfolio composition
The useful way to think about digital assets in a portfolio is not as a single speculative sleeve, but as distinct roles with each made cleaner to hold, report and rebalance once it is tokenized and sits under one custody standard.
- Tokenized traditional assets: equities, fixed income and funds issued or wrapped as tokens with the same economic exposure, with faster settlement and position-level servicing.
- Cash & liquidity: tokenized money market funds and regulated stablecoins used for on-chain cash management and near-instant settlement.
- Private markets & alternatives: tokenized private credit, real estate and infrastructure enable fractionalised access at ticket sizes once uneconomic to service.
- Native digital assets: A defined, risk-managed allocation to crypto assets, held under institutional custody and policy controls.
Note:This is a market perspective, not investment advice; allocation remains a matter for each client and their licensed adviser.
The future state: the portfolio of one
Passive structures still carry an average fee near 0.5%. In a tokenized world, an investor can track a benchmark by holding fractions of the underlying directly, or hold tokens of an actively managed basket, with rebalancing, tax-loss harvesting and tracking-error control executed as code. Extend that and the destination is the portfolio of one: indices assembled and continuously optimised per client, tax and ESG overlays native rather than bolted on, and corporate actions and settlement — via tokenized deposits, stablecoins or a future wholesale CBDC of the kind Project Acacia piloted — running automatically. The adviser’s role shifts from executing trades to architecting outcomes, and the one screen becomes the relationship. Two conditions gate the pace: interoperability across networks and platforms, and the regulatory clarity Australia has now largely delivered.
The infrastructure to build the asset, hold it under the same rigour as anything else on the balance sheet, settle as fast as the token moves, and reach the next generation on the experience they expect now exists. In Australia, the law and the market rails are catching up fast. The question is no longer whether to tokenize. It is which parts of the franchise you rebuild, before the wealth transfers to a client who assumes it was always this way.
