Tokenization and Stablecoins: How Financial Markets Are Being Digitized in Practice

International payments can still take several banking days to settle. Securities transactions are often finalized with delays as well. At the same time, money and value move digitally in nearly every other part of society. Against this backdrop, banks and financial institutions around the world are exploring how new technologies can make financial markets faster and more efficient. Two concepts at the center of this development are tokenization and stablecoins.

What is tokenization?

Tokenization refers to representing an asset digitally on a blockchain. This can include money, bonds, equities, or other financial instruments. A token functions as a digital proof of ownership that clearly records who owns what.

Instead of ownership records and transactions passing through multiple layers of banks, custodians, and clearing houses, transfers can occur directly and with full traceability. This has the potential to enable faster settlement, lower administrative costs, and greater transparency.

For this reason, many of the world’s largest banks and financial institutions are actively working with tokenization. Global players in investment banking, exchange trading, and payment infrastructure, including firms such as BlackRock, Robinhood, and PayPal, are already testing tokenized bonds, equities, funds, and internal payment flows. Increasingly, tokenization is viewed not as an alternative to traditional financial markets, but as the next step in their modernization.

What are stablecoins and why are they used?

Stablecoins are crypto assets designed to maintain a stable value, typically pegged to a traditional currency such as the US dollar or the euro. A USD-denominated stablecoin, for example, is intended to correspond to one US dollar.

This stability is achieved by backing the stablecoins with real-world assets. The largest stablecoins on the market hold reserves consisting of cash and highly liquid instruments, primarily short-term US Treasury bills. In theory, each token is backed by assets of equivalent value.

One way to understand stablecoins is to view them as digital money that can be transferred globally, around the clock, without banking hours or intermediaries. Whereas traditional bank transfers can involve delays and several intermediaries, stablecoins can be transferred almost instantly. This is why they are increasingly used for payments, liquidity management, and settlement of transactions in financial instruments built on new technology.

Market size and institutional outlook

The stablecoin market has grown rapidly and today amounts to roughly USD 300 billion in total market value. Several established financial institutions believe this is only the beginning. Standard Chartered, a global bank, estimates that the stablecoin market could grow to around USD 2 trillion before 2028, driven by increased use in payments and clearer regulatory frameworks, including initiatives such as the GENIUS Act in the United States. Citigroup similarly projects a market value of approximately USD 1.9 trillion by 2030 in its base scenario, with potential for further growth if institutional adoption accelerates.

Overall, tokenization and stablecoins aim to make financial markets more efficient, accessible, and inclusive. The development is progressing gradually, but it has the potential over time to reshape how global financial systems are structured and operate.

Exposure through exchange-traded products

For investors who wish to participate in this development, exchange-traded products from the Swedish company Virtune offer structured and regulated exposure to digital assets within the framework of traditional securities. The products are fully physically backed and listed on Nasdaq Stockholm.

Virtune Stablecoin Index ETP is an exchange-traded product that provides investors with a simple and cost-efficient way to gain exposure to the growing stablecoin ecosystem. The product tracks a diversified index of digital assets that form the infrastructure and rails enabling stablecoin usage, and which are expected to benefit as adoption increases. The index is rebalanced quarterly.

For investors seeking broader exposure to the overall development of digital assets, Virtune Coinbase 50 Index ETP is available. The product tracks the Coinbase 50 Europe Index, a leading global benchmark for digital assets that is often described as the crypto market’s equivalent of the S&P 500. The ETP provides exposure to up to 50 of the largest and most established crypto assets and is rebalanced quarterly.

Both products are issued by Virtune, a leading Swedish regulated asset manager specializing in crypto assets. Virtune combines traditional finance with the emerging crypto ecosystem to provide investors with a simple and secure way to access digital asset exposure.