Tokenized real-world assets (RWAs) on public blockchains recently exceeded $20 billion in market capitalization, driven by strategic deployments from major financial institutions. BlackRock, Apollo, Franklin Templeton, and Fidelity have all introduced tokenized investment vehicles, signaling growing acceptance and infrastructure maturity.
This article examines the primary institutional use cases of tokenized funds, anchored in real examples, and outlines why this transition matters for both issuers and distributors as global capital markets evolve.
Use Cases of Tokenized Funds
Use Case #1: Tokenized Money Market Funds and U.S. Treasuries
Tokenized MMFs and U.S. Treasuries have become one of the most prominent institutional use cases due to their low-risk profile and broad investor appeal. As of April 2025, tokenized U.S. Treasuries surpassed $5.75 billion in market value. Products like BlackRock’s BUIDL, Franklin Templeton’s FOBXX, and Matrixdock’s STBT exemplify how stable, yield-bearing fixed-income products are moving on-chain.
Why it fits: U.S. Treasuries and MMFs are low-risk, liquid, and already widely understood assets. Tokenizing them introduces 24/7 global access, faster settlement, and enhanced programmability without altering the risk profile. They serve as an ideal on-chain entry point for institutional portfolios seeking yield and compliance.
Key examples include:
- BlackRock’s BUIDL: ~$2.5B AUM tokenized MMF, deployed on Ethereum, used by institutions for liquidity management.
- Franklin Templeton’s FOBXX: Among the earliest tokenized MMFs, managing over $380M.
- Matrixdock’s STBT: Now live on InvestaX, this short-term Treasury token enables real-time yield accrual and redemption.
2. Use Case #2: Tokenized Private Credit
Tokenized private credit makes up the largest portion of the tokenized asset market with ~12.5B tokenized private credit on chain.
Private credit’s illiquidity and manual processes have historically deterred smaller institutions and cross-border investors. Tokenization enables fractional access, automated servicing, and potential secondary market liquidity.
Why it fits: Private credit is traditionally opaque and illiquid. Tokenization addresses these challenges by digitizing ownership, enabling fractional investment, and allowing for secondary trading. This improves capital efficiency and expands investor reach without compromising underwriting standards.
Recent activity includes:
- Apollo: Tokenized private credit on 6 blockchain networks, opening access to new capital pools.
- Mikro Kapital’s ALTERNATIVE eNote™, tokenized on InvestaX and Obligate, targeting investors seeking fixed-income linked to SME growth in developing markets.
3. Use Case #3: Tokenized Real Estate and Infrastructure
Tokenizing real estate and infrastructure allows institutions to broaden access to traditionally illiquid assets, improve capital efficiency, and attract global investor bases.
Why it fits: Real estate and infrastructure assets typically involve high minimum investments, complex structures, and regional access limits. Tokenization offers fractional ownership, transparent governance, and potentially global distribution, particularly attractive for ESG and alternative asset funds.
Recent examples include:
- DAMAC Group: Announced a $1B tokenized real estate partnership in early 2025.
- Les Constructeurs du Bois (via InvestaX): ESG-aligned tokenized bond financing sustainable construction projects in France.
4. Use Case #4: Tokenized Private Equity and Venture Funds
Private equity and venture capital funds are adopting tokenization to reduce onboarding friction and offer more flexible investor terms. Hamilton Lane and Franklin Templeton have both launched tokenized PE/VC vehicles.
Why it fits: PE and VC funds often face onboarding inefficiencies and capital call friction. Tokenized structures reduce lock-up burdens and allow sponsors to access a more diversified investor pool. Digital onboarding and smart contract-based flows can modernize the LP-GP relationship.
Recent examples include:
- Hamilton Lane: Uses Securitize to issue tokenized feeder funds.
- Diamond Standard Fund (distributed via InvestaX): Offers exposure to regulated, diamond-backed assets across Asia and the U.S.
5. Use Case #5: Tokenized Structured Products & Yield Strategies
Tokenized yield products wrap government debt or other fixed-income strategies into programmable digital wrappers.
Why it fits: Structured yield products are inherently customizable, making them well-suited for tokenization. Smart contracts can manage rebasing, interest payments, and compliance rules. This results in highly efficient yield delivery, particularly for digital asset users or globally dispersed investors.
Recent examples include:
- Ondo’s OUSG: Offers daily rebased tokenized Treasury exposure.
- Hashnote’s USYC: A tokenized short-duration yield fund reaching ~$1B AUM.
- InvestaX Earn: Allows qualified investors to access T-Bill strategies with daily yield distribution via USDC.
What Comes Next: Strategic Implications
As regulatory frameworks mature across the EU (MiCA), Singapore (MAS), and UAE (VARA), the conditions for scalable, cross-border tokenized fund strategies are falling into place.
Early movers can gain branding advantages, test scalable channels, and build new revenue pipelines as tokenized financial infrastructure becomes normalized.
Explore how your firm can benefit from tokenized fund infrastructure. Visit InvestaX or reach out to learn more.