For years, tokenisation was often associated with cryptocurrencies and speculative digital assets. That narrative is rapidly changing.
At Nexus Luxembourg, industry leaders from traditional finance and the digital asset ecosystem argued that tokenisation is increasingly becoming an infrastructure story rather than a crypto story. "We take traditional finance, real assets, real funds and real money and we put them on-chain," said moderator Sébastien Schmitt, advisory partner for regulatory, risk and compliance at PwC Luxembourg. "The same assets, the same rules and the same regulations." The implication is significant for Luxembourg. As Europe’s largest cross-border fund centre, the country has an opportunity to play a central role in the next evolution of investment fund distribution.
Beyond crypto
One of the strongest messages from the discussion was that tokenisation is already moving beyond the world of cryptocurrencies. Clément Milville, head of technology at Coinbase, pointed to several examples where digital assets have already reached meaningful scale.
Payments represent the most mature use case. Stablecoins such as USDC already process trillions of dollars of transactions annually, demonstrating that blockchain-based infrastructure can support large-scale financial activity. Tokenised money market funds are also gaining traction.
Milville highlighted the rapid growth of BlackRock’s tokenised money market fund, which surpassed $1bn in assets within its first year. At the same time, decentralised finance protocols are increasingly using tokenised treasury assets as collateral. The next frontier, he suggested, will be tokenised equities and broader institutional adoption.
Why money market funds are leading the way?
While tokenisation has attracted attention across many asset classes, money market funds have emerged as the industry’s preferred entry point. Kasia Majchrzak, fund board director at Franklin Templeton Funds, explained why. The asset class is already familiar to investors, carries relatively low risk and operates within a well-established regulatory framework. More importantly, tokenisation solves several practical challenges.
Traditional fund transactions often require investors to wait until the following day before receiving their securities. Tokenised funds reduce that delay dramatically. Transactions can be completed within minutes rather than days. The technology also enables immediate yield distribution, continuous availability and new collateral management use cases."Tokenised funds never sleep," Majchrzak said, noting that investors can transfer holdings at any time rather than being constrained by traditional market hours.
Perhaps most importantly, tokenisation is creating bridges between traditional finance and digital asset ecosystems. According to Kasia Majchrzak, crypto-native investors who previously lacked direct access to regulated investment funds can now enter the market through blockchain-based structures.
A €30trn opportunity
The potential scale of the market extends far beyond current pilot projects. Jérôme Hallay, managing director at Strategy&, PwC Luxembourg, argued that tokenisation is addressing a large pool of capital that remains underutilised today. He pointed to the trillions of euros sitting in bank deposits, corporate treasury accounts and cash reserves across the European financial system.
Tokenised money market funds provide a mechanism to transform those idle balances into yield-bearing assets while maintaining liquidity and accessibility. Once the infrastructure is in place, Hallay believes the opportunity expands significantly. Tokenised fund distribution could eventually extend across the broader investment fund market and alternative assets universe, representing tens of trillions of euros in potential assets. "The token is a commodity," he said. "The real challenge is the business strategy and the operating model."
The distribution model is changing
Several speakers argued that tokenisation’s most profound impact may ultimately be on distribution rather than investment products themselves. 
Instead, he argued that firms need to rethink their operating models if they want to capture the efficiency gains offered by the technology. The potential benefits include lower costs, faster settlement and greater transparency. For Luxembourg’s fund industry, which built its success on cross-border distribution, the implications could be considerable.
Luxembourg’s advantage
The discussion repeatedly returned to Luxembourg’s regulatory environment. Franklin Templeton’s tokenised fund became one of the first blockchain-native Ucits funds approved in the Grand Duchy. According to Kasia Majchrzak, that achievement was made possible by a regulatory framework that had already evolved to accommodate blockchain-based financial instruments.
Luxembourg’s successive blockchain laws created legal certainty around the issuance and transfer of financial instruments on distributed ledger technology. More importantly, speakers highlighted the collaborative approach adopted by the CSSF.
The regulator asked difficult questions, Kasia Majchrzak acknowledged, but did so with the objective of finding workable solutions rather than blocking innovation. That regulatory openness could prove decisive as competition intensifies across Europe.
What comes next?
Despite the progress made so far, speakers agreed that tokenisation remains in its early stages. More institutional adoption is needed. Additional infrastructure must be developed. And Europe still lacks some critical building blocks, particularly around digital cash and stablecoin ecosystems.
Yet the mood on stage was notably optimistic. The debate has shifted. Tokenisation is no longer being discussed as a theoretical possibility. The technology exists. The regulatory framework is emerging. The first products are already live.
For Luxembourg, the challenge is no longer proving that tokenisation works. The challenge is ensuring that the next generation of fund infrastructure is built here rather than somewhere else.
