NYLIM was the latest entrant in the list of asset management giants taking steps into tokenization, partnering with Centrifuge (CFG) to bring one of its high-yield corporate bond strategies to the chain.
For NYLIM, tokenization is less about launching blockchain versions of existing funds than about improving the way portfolios are assembled.
Sy said custom investment strategies often combine ETFs, bonds, private credit and other assets, creating operational complexity that makes customization difficult to scale.
“The ultimate goal is to integrate customization within the asset itself, rather than customization focusing on the operations of different assets,” he said.
Tokenization could also streamline transfer agency, settlement and other administrative processes, reducing costs that ultimately benefit investors.
“If you can reduce that number by 10% or 20%, it will be a better result for our clients,” Sy said.
DeFi awaits
Sy said stablecoins have become the first practical bridge linking traditional financial institutions to the chain.
The stablecoin market has grown to over $300 billion and is increasingly used for cross-border payments.
As banks, payments companies, and fintech companies adopt stablecoins for cross-border payments and treasury management, many will eventually look to institutional-grade tokenized assets where those balances can generate yield rather than remain in cash.
“Stablecoins were probably one of the biggest unlocks in the last two years,” Sy said. “The adoption of stablecoins was the gateway to incorporating them into the chain.”
