If the rails are being built, what does an asset manager still need to do?

Two ETF managers recently asked me whether they should bother spending time looking at onchain structures and solutions if NYSE, Nasdaq and the rest of the legacy market infrastucture is moving onchain anyway. A related question has also come up, with managers asking whether native tokenisation is simply better than wrapping or representing an existing asset.

These questions start with the structure, but I think managers need to start one step earlier and ask what they want tokenisation to change. Exchanges, custodians and specialist platforms will supply more of the infrastructure over time, but that does not determine what makes sense for the manager.

The manager still needs to decide whether tokenisation can add distribution or product value, what the investor will hold at the end of it, and how much of the economics and control the manager keeps when other parties supply parts of the product or its distribution.

The exchange route solves market plumbing

Nasdaq received SEC approval in March 2026 for tokenised securities to trade alongside their traditional counterparts, and NYSE adopted a similar framework in April. Both rely on DTC's tokenisation infrastructure. DTC ran live production transactions in July with more than 30 firms, ahead of the broader service launch planned for October 2026.

NYSE is separately developing a 24/7 digital venue with stablecoin funding and onchain settlement. That project could take the market further, although the venue remains under development.

For the manager of an eligible US-listed ETF, these developments could remove much of the reason to build separate infrastructure simply to change how the security trades or settles. But they are much less relevant to private funds and products listed in other markets.

Even for an eligible US-listed ETF, while the exchange route addresses market plumbing, it does little for how the manager reaches investors through new channels, which is where I have seen much of the practical interest in tokenisation.

Distribution raises harder questions

Franklin Templeton is already taking different approaches across its business. Its Franklin OnChain US Government Money Fund (BENJI) uses public blockchain infrastructure as part of the official record of share ownership. Franklin has separately partnered with Ondo to make exposure to five existing Franklin-managed ETFs available through Ondo. Franklin continues to manage the ETFs while Ondo provides the tokenisation infrastructure and digital distribution layer.

In the Ondo structure, the onchain investor holds a tokenised note that tracks the economics of the relevant ETF rather than a share in the ETF itself, with the underlying securities held as collateral. The notes are issued through a BVI vehicle and offered outside the US to non-US investors through Ondo's onchain platform.

Franklin therefore gets another distribution channel without rebuilding the underlying ETFs. Ondo supplies the onchain instrument and the distribution infrastructure.

That choice goes well beyond technology. The wrapper provider controls the onchain instrument and its distribution channel, and depending on the arrangement may hold much of the onchain investor relationship as well.

A manager considering a similar model should be clear about how its strategy and name are being used, what it is being paid for, and how much control it retains over the onchain product and investor relationship.

Native issuance is one choice

Franklin's own products also show why I would be cautious about treating native tokenisation as inherently superior. BENJI incorporates blockchain into the fund's ownership infrastructure, while the Ondo arrangement keeps the existing ETFs in place and adds a separate onchain instrument and distribution route.

BENJI's ownership record runs on public blockchains, but transfers are limited to whitelisted wallets through a permissioned recordkeeping system. The transfer agent remains in control of the ownership record and can limit transfers. A native model does not by itself make the asset freely transferable or usable elsewhere onchain.

Native issuance can simplify the relationship between the security and its blockchain record and remove some of the structural layers involved in a wrapper. SEC staff drew the line in the same place in January 2026, separating securities tokenised by or on behalf of their issuer from securities tokenised by third parties and noting that the rights available to investors can differ materially between the two. That distinction goes to what the investor holds. How the product is distributed and used onchain depends on the wider arrangements around it.

A manager that wants the ownership infrastructure of its own product onchain may have good reasons to choose a native model. A manager looking for another distribution channel for an established product may reach a different conclusion. Calling a structure native describes how ownership is represented, but it says little about which model serves either objective.

Bitwise divides the roles differently

Bitwise's Automated Token Portfolios, launched last month, take a different approach. Bitwise designs the model portfolios, Coinbase provides the tokenised stocks and Glider implements the portfolios.

Model portfolios and separately managed accounts have long allowed managers to deliver investment methodology without a pooled fund. Here Bitwise monetises the methodology without issuing a fund of its own. It charges a methodology access fee, while the tokenised stocks remain in the investor's wallet and Glider is authorised to rebalance the portfolio. The product is currently available to eligible investors outside the US.

For traditional managers, that widens what an onchain strategy can look like. The manager's contribution can be the investment methodology while other firms provide the instruments and implementation. An asset manager does not necessarily need to own or control every layer.

The strategic choice is which role the manager wants to own and which it is comfortable leaving to others. That choice affects how the manager earns from the product and how close it remains to the investor.

Waiting can be an informed decision

A firm can have a digital asset strategy that concludes it makes more sense to wait. The available infrastructure may not yet serve its products, investor demand may still be weak, or the economics may not justify the work at this stage.

A manager that decides to wait should be able to say what would change its mind. That could be infrastructure becoming available for its own products, clear demand from investors it cannot reach today, or a competing product changing what its investors expect. Those triggers give the firm a basis for revisiting the decision as the market develops.

A manager that wants to move now needs the same discipline. It should know what it wants to improve and what the investor will ultimately hold, then decide whether the resulting economics and degree of control make sense.

My last piece asked what the token is actually for. For an asset manager, the next question is what digital assets should change about the business. Waiting may be the right decision today, but there should be a reason for it.