Distributed ledger technology repo turnover reached about $370 billion per day in late 2025, according to International Capital Market Association figures cited by CEPR, marking a shift as tokenised finance moves from experimentation toward early adoption in core financial markets.
Tokenised Money Market Funds and Institutional Adoption
Tokenised money market funds have brought roughly $10 billion on-chain, driven by large institutional asset managers and digital-native entrants. These yield-bearing instruments serve dual liquidity and collateral management purposes. Since mid-2025, the outstanding volume of these funds has decoupled from Bitcoin price dynamics, indicating that tokenised finance follows a distinct path separate from traditional crypto asset cycles.
Despite this growth, ownership remains heavily concentrated. As of June 2026, the top five largest wallet addresses in the $2.37 billion BlackRock USD Institutional Digital Liquidity Fund (BUIDL) hold 70% of the fund’s shares. Market participants surveyed by the Eurosystem project that tokenisation will take five to ten years to achieve dominance across issuance, settlement, and trading.
Market Fragmentation and Central Bank Integration
Tokenised markets still face structural frictions, including an absence of widely adopted tokenised cash settlement assets, high funding costs, and limited cross-platform interoperability. These hurdles generate protocol fragmentation and occasional violations of no-arbitrage conditions. To maintain monetary policy effectiveness, central banks are adapting their operational frameworks.
The Eurosystem began accepting distributed ledger technology marketable assets as eligible collateral for credit operations in March 2026. Furthermore, the launch of Pontes on September 21, 2026, enables wholesale settlement of tokenised asset transactions directly in central bank money.
Frequently Asked Questions
What is the main driver behind the growth of tokenised money market funds?
Institutional asset managers and digital-native entrants use these regulatory-compliant, yield-bearing instruments for liquidity and collateral management, bringing roughly $10 billion on-chain.
How are central banks responding to the rise of tokenised finance?
Central banks are adjusting operational frameworks to ensure technology neutrality. For instance, the Eurosystem accepted distributed ledger technology assets as eligible collateral in March 2026 and launched the Pontes initiative on September 21, 2026, to settle wholesale transactions in central bank money.
Why do tokenised markets currently experience pricing anomalies?
Market fragmentation across different protocols, a lack of interoperability, and limited secondary liquidity lead to frequent violations of no-arbitrage conditions and extreme ownership concentration in funds like BUIDL.
Related reading