Fed’s Cook Says Tokenization Can Boost Efficiency but Will Not Replace Traditional Finance

Tokenization maps assets such as deposits and securities onto blockchains, shortening settlement times and enabling round-the-clock transfers. Citi, JPMorgan and the Depository Trust & Clearing Corporation (DTCC) say the goal is not to build a separate financial system but to connect blockchain technology to existing banking rails. Intermediaries remain necessary for compliance, risk controls and settlement guarantees, while interoperability across banks is also critical to corporate adoption.

Executives from the three institutions said at Consensus 2026 in Miami on May 5, 2026, that tokenization had moved beyond experimentation into real-world transactions. Citi's tokenized deposits grew from several million dollars a year earlier to billions of dollars. JPMorgan's Kinexys has processed more than $1 trillion cumulatively, while DTCC plans to move parts of its $150 trillion securities infrastructure onto a shared digital layer supporting 24/7 transfers of cash and securities.

Asset tokenization records ownership of funds, bonds and other assets on a digital ledger, allowing fractional ownership, instant transfers and round-the-clock trading. It is particularly significant in the United States, where about 40% of the population still does not participate in capital markets. BlackRock views digital assets as infrastructure connecting traditional finance with blockchain, rather than simply as a cryptocurrency strategy.

BlackRock Chairman and CEO Larry Fink said in his annual shareholder letter published on March 23, 2026, that tokenization is akin to the internet in 1996 and could reduce issuance, trading and access costs through regulated digital wallets. The company has nearly $150 billion in digital-market-related assets, including $65 billion in stablecoin reserves and nearly $80 billion in digital-asset ETFs.