Odd Lots

Evolving Money: The Tokenization Tipping Point (Sponsored Content)

February 8, 2026

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  • Tokenization is predicted by experts like Rick Edelman to be the dominant investment platform, eclipsing ETFs within the decade due to technological superiority offering lower costs, higher liquidity, and broader asset access. 
  • Traditional finance institutions like BlackRock, Fidelity, and JPMorgan are actively embracing tokenization, exemplified by tokenized money market funds and commercial paper issuances, validating the technology's utility. 
  • The speed of institutional adoption hinges on regulatory clarity from Congress, as the lack of established rules for custody and taxation currently impedes broader engagement, despite strong internal development efforts by banks and Fortune 500 companies. 

Segments

Introduction to Evolving Money
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(00:00:00)
  • Key Takeaway: The sponsored podcast, Evolving Money, focuses on how institutional investors are adopting crypto and the evolution of the monetary system through tokenization.
  • Summary: The episode, sponsored by Coinbase, introduces the concept of tokenization as the next logical evolution of the monetary system being adopted by traditional finance. Tokenized assets have grown eightfold in less than three years to over $30 billion across various asset classes. Host Angie Lau notes that this episode specifically explores tokenization, defined as representing a real-world asset on a blockchain.
Wall Street’s Initial Crypto Antipathy
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(00:00:21)
  • Key Takeaway: Wall Street initially opposed crypto because it was not invented by them, leading to a decade of successful suppression or ignoring the technology.
  • Summary: Rick Edelman explains that the financial industry’s initial antipathy toward crypto stemmed from a desire to control and own new innovations. This led to efforts to quash or ignore the technology for about ten years. However, the industry eventually recognized that crypto was permanent and that the underlying technology was compelling.
Tokenization Drivers and Adoption Examples
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(00:02:47)
  • Key Takeaway: The primary drivers for tokenization adoption are increased liquidity, broader investor access, and operational efficiency, evidenced by major firms launching tokenized funds.
  • Summary: Major asset managers are embracing tokenization, with BlackRock launching the tokenized Biddle Fund on Ethereum ($2.8 billion total value) and Fidelity rolling out its own tokenized money market fund (over $200 million). The core benefits driving this adoption are liquidity, access, and operational efficiency.
Edelman’s Bullish Prediction on Tokenization
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(00:03:45)
  • Key Takeaway: Rick Edelman predicts tokenization will become the dominant investment platform, causing ETFs to become obsolete within five years because tokens are technologically superior.
  • Summary: Edelman argues that tokenization is the next iterative step following the shift from mutual funds to ETFs, offering superior technology. Tokens trading on blockchains will further reduce costs, increase liquidity, and expand asset diversification beyond what current ETFs provide. He asserts that consumers will adopt this technology because it is faster, cheaper, safer, and more transparent than current trading methods, such as the limited (9:30) to (4:00) trading window.
Real Estate Tokenization Potential
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(00:06:39)
  • Key Takeaway: Tokenization can unlock massive value in illiquid assets like real estate by fractionalizing high-value properties into affordable, liquid $10 tokens, opening the sector to retail investors.
  • Summary: Early real estate tokenization examples, such as the St. Regis resort in Aspen, demonstrated fractionalizing multi-million dollar assets into small, affordable tokens. This process directly addresses real estate’s high cost and illiquidity, allowing retail investors access to commercial property, a market three times larger than the global stock market.
Banking Cost Savings via Blockchain
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(00:08:12)
  • Key Takeaway: JPMorgan’s internal blockchain, Onyx, demonstrates significant cost savings, with the broader industry projected to save $120 billion annually by adopting blockchain technology.
  • Summary: JPMorgan’s Onyx blockchain handles $2 billion daily in cross-border remittances, proving faster and cheaper alternatives to systems like SWIFT. JP Morgan estimates that blockchain technology will save banks $120 billion per year in overhead. Currently, nine out of ten banks and two-thirds of Fortune 500 companies are developing blockchain technology for deployment soon.
Tokenization Beyond Financial Assets
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(00:09:53)
  • Key Takeaway: In five years, everything, including personal identification, records, and income streams, will be tokenized to enhance ownership and utility.
  • Summary: Edelman foresees tokenization extending beyond stocks and bonds to include driver’s licenses, academic records, and health records for easier management. Home ownership can be tokenized to allow retirees to sell fractional pieces of their home for income without moving. Furthermore, salaries and intellectual property, like music catalogs, can be tokenized, allowing fans to become fractional owners.
Lucas’s Measured Approach to Adoption
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(00:11:51)
  • Key Takeaway: JPMorgan’s Scott Lucas emphasizes that adoption pace is dictated by market decisions on which technology (legacy vs. blockchain) proves superior for specific use cases, not by emotional preference.
  • Summary: JPMorgan recently executed a landmark $50 million commercial paper issuance on Solana’s public blockchain, settled using Stablecoin, to pressure-test market appetite. Lucas states that the market, not JP Morgan, will ultimately decide if blockchain becomes the preferred technology or integrates with legacy rails. He stresses the need to build evidence to validate the thesis that blockchain is a better technology for certain instruments.
Blockchain Impact on Fixed Income Instruments
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(00:17:09)
  • Key Takeaway: Tokenization allows for fundamental changes to fixed income instruments, such as calculating coupon payments to the millisecond and embedding smart contracts to automate interest rate swaps.
  • Summary: The single, agreed-upon record on a distributed ledger eliminates disputes over asset ownership and cash flow management. This enables calculating coupon payments with extreme precision (to the millisecond) and changing payment frequencies based on investor or issuer needs. Smart contracts can embed interest rate swaps, potentially allowing less mature companies to access debt capital markets more easily.
Timeline Disagreement and Regulatory Hurdles
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(00:19:47)
  • Key Takeaway: While Edelman predicts full tokenization within ten years, Lucas views this as improbable due to the significant time required for technological, legal, and regulatory readiness.
  • Summary: Scott Lucas disagrees with Edelman’s aggressive timeline, noting that readiness involves technological deployment, legal clarity, regulatory understanding, and internal system upgrades, which inherently take time. Edelman identifies the lack of clear laws from Congress regarding custody and taxation as the primary impediment to accelerating institutional adoption.