Major US banks and financial institutions believe the transition toward a digitized financial system will begin gradually before accelerating rapidly once adoption reaches a critical turning point, according to a new report from Moody’s Ratings.
Following discussions with banks and market intermediaries, Moody’s said most industry participants see tokenization and blockchain-based finance as an inevitable long-term trend. However, uncertainty remains around how quickly adoption will occur and which sectors will move first.
According to the report, many financial firms expect early adoption to remain concentrated in simpler areas such as tokenized funds, stablecoins, and short-term financial instruments, operating alongside existing financial infrastructure during the initial phase.
Moody’s noted that while progress may appear slow in the near term, many executives believe the industry will eventually hit a tipping point where adoption expands rapidly across additional assets, institutions, and financial use cases.
Tokenization Gains Institutional Momentum
Tokenization has become one of the primary drivers of institutional interest in blockchain technology and digital assets. Investment firm ARK Invest estimates the broader digital asset market — including Bitcoin, decentralized finance, stablecoins, and tokenized real-world assets — could grow into a $28 trillion industry by 2030.
Although current tokenization activity remains relatively limited, Moody’s said the market is steadily expanding. Existing adoption is largely centered around cryptocurrency trading, cross-border payments, and selected institutional applications.
Data from RWA.xyz shows the tokenized real-world asset sector has grown more than 420% since the beginning of 2025, reaching approximately $31.6 billion in value.
To prepare for future demand, nearly all major banks and financial market firms have already established digital asset divisions or innovation teams and are actively participating in blockchain pilot programs and infrastructure testing initiatives.
Moody’s said these efforts are largely strategic, as institutions want to avoid falling behind if digital asset adoption accelerates unexpectedly.
The report highlighted recent examples of this preparation, including Morgan Stanley’s appointment of veteran executive Amy Oldenburg to lead its crypto division after the bank announced plans involving crypto exchange-traded funds and digital wallet services.
Three Possible Paths for Financial Markets
In a separate report released Monday, Moody’s outlined three potential scenarios for how tokenization could reshape the financial system.
The agency considers the most likely outcome to be a “steady growth” scenario, where tokenization expands gradually in areas such as stablecoins and tokenized deposits while traditional banks, asset managers, and financial infrastructure providers continue maintaining dominant roles.
Under a lower-growth scenario, regulatory uncertainty, legal challenges, and limited consumer demand would keep tokenized assets confined to niche applications with only minor changes to the broader financial system.
The most disruptive possibility would involve rapid adoption of tokenized assets and stablecoins as mainstream onchain settlement tools. In that scenario, some traditional financial intermediaries could face increasing pressure.
Moody’s warned that payment processors, correspondent banks, and parts of the legacy financial settlement system could lose revenue as blockchain-based infrastructure reduces settlement delays and bypasses older financial networks. Smaller and mid-sized banks could also face declining deposit balances if users increasingly move funds into tokenized financial ecosystems.
Growing Attention Around AI and Tokenized Assets
Interest in tokenization is also increasingly intersecting with artificial intelligence. Macro investor and former hedge fund manager Jordi Visser recently argued that tokenized assets could become a key component of AI-driven payment systems and autonomous financial agents.
At the same time, global regulators continue monitoring potential risks. Earlier this year, the International Monetary Fund acknowledged that tokenization could improve financial transparency and reduce inefficiencies but warned it may also introduce new challenges related to financial stability, legal certainty, and systemic risk.
