Asset managers worldwide are starting to embrace blockchain and tokenization as a means to revitalize their operations and product offerings. This shift is seen as a necessary evolution for firms managing trillions in private equity, credit, and real assets. Despite their sophisticated portfolio strategies, many asset managers have been criticized for clinging to outdated infrastructure—one more suited to the era of fax machines than the digital age. Blockchain, however, promises not only to streamline these operations but also to open new frontiers in the investment landscape.
Modernizing Fund Infrastructure
Today, many investment firms still juggle a complex web of administrators, custodians, and transfer agents, all operating on disparate systems. This fragmentation often leads to errors, delays, and increased compliance costs, as records are manually reconciled at every stage of a fund’s lifecycle. Blockchain technology, with its promise of a unified, transparent ledger, offers a compelling solution.
“Blockchain isn’t just about cutting-edge tech,” says financial analyst Maria Jensen. “It’s about creating a single source of truth for all parties involved.” A permissioned ledger allows real-time updates and visibility, reducing the need for weekly reconciliations. Smart contracts can automate capital calls and distributions, eliminating human error and ensuring instant, transparent payments. In essence, blockchain is transforming the operational landscape, making fund administration cleaner and more efficient.
The Next Generation of Investment Vehicles
Beyond operational upgrades, blockchain is paving the way for innovative investment products that were previously inconceivable. Tokenized private credit funds like Apollo’s, which has transferred over $100 million on-chain, exemplify this trend. This follows a pattern of institutional adoption, which we detailed in Tokenization Firm Midas Introduces Private Credit Product with Fasanara, Morpho and Steakhouse. Meanwhile, Franklin Templeton’s Benji platform is breaking ground with tokenized money market funds, enabling peer-to-peer share transfers and intraday yield calculations.
Such advancements don’t just streamline operations. They introduce fractional ownership and secondary liquidity, offering investors unprecedented access without the traditional LP commitment. “The real game-changer,” notes crypto strategist Liam Hart, “is the ability to build new on-chain products.” On-chain yield vaults, for instance, represent a novel investment category. Companies like Veda Labs are using smart contracts to automate complex investment strategies, embedding compliance and fee logic directly into protocols.
These products are a testament to the transformative potential of blockchain. More transparent than ETFs and more automated than hedge funds, they offer a programmable investment solution tailored for digital-native allocators. For a deeper dive into the market dynamics, see Private credit powers $24B tokenization market, Ethereum still dominates — RedStone.
The Time to Build Is Now
For asset managers, the message is clear: modernization isn’t optional—it’s imperative. Blockchain isn’t a disruption; it’s the upgrade that private markets have been anticipating. As the first movers demonstrate what’s possible, those who cling to legacy systems risk obsolescence.
The tools are in place. The infrastructure is operational. Asset managers who fail to adapt may find themselves left behind, while others are already building the next generation of investment platforms—on-chain, in real time.
As the industry continues to evolve, the question remains: will asset managers seize this opportunity to innovate, or will they watch as the digital frontier unfolds without them? The clock is ticking, and the future waits for no one.
Source
This article is based on: Asset Managers: Blockchain Can Modernize Your Operations and Reinvigorate Your Product Line
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
