Tokenised funds: rethinking fund operations and infrastructure

The fund management industry is at a turning point. With maturing blockchain technology, evolving regulations and growing institutional interest, tokenised funds are gaining traction as on-chain investment vehicles that generate yield. Our latest publication examines how tokenising fund units is already transforming ownership, distribution and operations. It further outlines how a broader structural impact can materialise.

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Rapid growth and market momentum

The tokenised asset universe has grown more than fourfold since early 2025, from USD 5.7 billion to over USD 30 billion. Tokenised money market funds holding US Treasury debt currently amount to almost USD 15 billion, making up the largest share of tokenised assets with 47%.

_{Evolution of tokenised assets. Source: RWA.xyz. (May 2006).}

Other tokenised asset classes - real estate, commodities, private credit and private equity - are developing but remain at earlier stages. Tokenised Treasuries have benefited from the dollar's global role, the depth of the US Treasury market, and the presence of major tokenisation platforms based in the US.

Market projections suggest continued growth. Industry estimates indicate tokenised fund AUM could reach USD 235 billion by 2029. PwC's 2025 Asset and Wealth Management Survey notes that 38% of asset managers view tokenisation as a significant driver of revenue growth by 2030.

Key value drivers

Tokenisation creates programmable digital ownership without changing the fund’s legal structure or underlying assets. In the near term, the clearest benefits will tend to be in process automation, controlled transferability and digital distribution enablement. Over time, as on-chain payment rails, market liquidity and industry standards mature, more structural efficiency gains may emerge. For financial institutions, the strategic question is therefore not whether tokenisation will universally replace existing infrastructure, but where it can deliver measurable value under current market conditions:

Tokenisation consolidates fragmented ownership records onto a shared on-chain ledger, enabling faster settlement and automated compliance enforcement. It reduces settlement risk through atomic transactions and embeds eligibility rules directly into transfer logic, reducing manual monitoring while maintaining regulatory accountability.

Tokenisation supports direct-to-investor digital channels, fractional ownership and integration with modern wealth platforms. Permissioned transfers and 24/7 capabilities improve liquidity, especially for collateral use cases.

Early movers build digital expertise and ecosystem readiness. A maturing network of digital custody providers and tokenisation platforms reduces implementation barriers.

Transforming the fund value chain

Our in-depth analysis focuses on the high-impact areas: distribution, subscription and redemption, and income distribution. In these areas, tokenisation most fundamentally alters the traditional workflow by reducing intermediaries, automating manual processes through smart contracts and replacing fragmented record-keeping with a single blockchain-based ownership ledger.

Hybrid models reduce intermediary reliance. Investors can onboard and subscribe via digital platforms. Developments like portable on-chain identities and real-time secondary trading allow near-continuous liquidity.

Multi-day, multi-system processes become atomic transactions. Smart contracts mint tokens using an on-chain NAV, with the blockchain as the single ownership ledger.

Smart contracts automate payouts via rebasing or NAV accumulation, cutting manual effort. In the future, fully on-chain flows from tokenised assets could remove batch processing.

Technology and architecture

Tokenised funds represent ownership as programmable tokens on blockchain, while the legal vehicle and assets can stay traditional. To successfully set up tokenised fund structures, companies must first understand what foundational elements are critical:

Blockchain selection for tokenised funds involves choosing between public blockchains (e.g. Ethereum, Solana) that offer openness and liquidity with permissioned access controls or private blockchains (e.g. Canton Network) for institutional use cases requiring confidentiality - with the choice directly impacting interoperability, scalability, transaction costs and network effects. The market trend favours public blockchains with regulatory guardrails over fully private alternatives, balancing decentralisation benefits with compliance requirements.

Smart contract architecture for tokenised fund shares defines the programmable logic governing the token lifecycle - including minting, redemption, transfer restrictions, NAV integration and yield distribution - requiring careful design of compliance rules, governance controls and emergency functions that align with fund operations and regulatory requirements.

Tokenising fund shares requires embedding blockchain infrastructure into existing fund operations across wallet custody, data feeds, transfer agents, distribution channels and regulatory compliance. The architecture must balance blockchain's immutability with recovery mechanisms through administrative controls, while managing cybersecurity risks that are immediate and often irreversible compared to traditional finance.

Regulatory landscape: an opportunity for Switzerland

Switzerland has established a coherent legal framework for tokenised funds by integrating distributed-ledger technology into existing financial market laws, allowing fund units to be directly tokenised on blockchain under the Collective Investment Schemes Act without creating new product classes or requiring special structures.

Key regulatory focus areas include ensuring DLT registers meet legal requirements, updating investor disclosures to address technology and cyber-risks, implementing on-chain AML/KYC whitelisting and managing outsourcing and IT governance through FINMA standards.

Strategic imperative

The structural constraints of the traditional fund share model are embedded features of legacy infrastructure. Tokenised shares offer a mechanism to address selected inefficiencies today while establishing a foundation for more synchronised ownership management over time.

The trajectory, however, will depend less on technological feasibility than on coordinated ecosystem evolution. In this context, tokenisation should not be understood as a replacement of the existing fund architecture, but as a gradual reconfiguration of the ownership layer, one that requires alignment across the full market infrastructure to achieve scale.

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Tokenised funds: rethinking fund operations and infrastructure

PwC’s expertise in asset management, digital assets and Swiss/European regulation can help guide institutions from strategy definition and target operating model design to fund launch. Read our report for more detailed insights and reach out if you would like to continue the conversation in more depth.