BlackRock, JPMorgan, Franklin Templeton. The biggest names in traditional finance are tokenising assets on Ethereum. $17 billion in real world assets are already on-chain and the number keeps climbing. Joining me to unpack it all is Marius Smith, Co-Founder of Ethereum Institutional. Marius, welcome to Wall Street.
Thank you so much.
$17 billion in real world assets are now tokenised on Ethereum. What actually changed to make institutions move this fast?
Three things came together. The regulatory clarity — the SEC and CFTC confirming Ethereum as a digital commodity and providing clarity on staking. The ETF approval, which was a landmark moment for the industry. And a rising interest rate environment, which made money market funds and Treasury-backed stablecoins incredibly attractive — those found a natural home on Ethereum. It is easier for institutions to underwrite the risk. And it has been around long enough that everyone understands the chain both technically and operationally. It has the largest ecosystem, which makes it attractive from a distribution and commercial perspective.
Nasdaq just invested $100 million in infrastructure for tokenised equity trading. Is the stock exchange of the future going to run on Ethereum?
I cannot speak for them specifically. But what you can see — we had an example this week with OKX sending a letter to the SEC saying they want to launch a tokenised securities venue leveraging OKX’s Layer 2. We will probably see a hybrid world. A lot of exchanges and brokerages will use Ethereum or its L2s as settlement layers. Yes, I do think Ethereum will play a role in the future.
The SEC and CFTC confirmed Ethereum as a digital commodity earlier this year. How much did that regulatory clarity actually matter?
It mattered a lot for custodians, for ETF issuers, for all the market participants that touch Ethereum. Having clarity that Ethereum is a commodity and not a security is hugely important. And as it pertains to staking — clarity that a staking transaction is not a security transaction gives institutions more peace of mind, enables them to participate in staking, and allows them to reap the rewards while providing network security.
Ethereum Institutional launched to be the front door for banks and governments evaluating Ethereum. What are institutions actually asking for?
The first thing they have been lacking is someone they can speak to — a neutral front door that is not pushing any vendor product. That has been missing. So the first question is always: who do I talk to? The second is how do we engage, how do we navigate all the different token standards and layer tools, how do we think about privacy, and how do we participate in a way we are comfortable with?
In the Gulf, what is the region building on Ethereum — or still evaluating?
There are certain differences between countries, but generally a lot of the GCC countries are experimenting with Ethereum in various ways — some on Hyperledger, some with pilots in Abu Dhabi. There is definitely a lot of experimentation, but also a lot of appetite to do more. That is also why our team is spending much more time here in the region — to support that journey and spread the case for why Ethereum makes sense strategically.
Tokenisation promises faster settlement, more liquidity, and lower costs. Which of those three is actually delivering today?
Settlement first and foremost. You can have settlement within minutes, 24/7 trading, and collateral mobility — that is very evident today. On liquidity, we are still early and secondary markets for tokenised assets can be thin. But once institutions move in, I am very positive that will fundamentally change. On cost disruption — that was the initial promise and we are moving in the right direction, but we have not yet as an industry fully reaped those benefits. We are definitely moving there. That is transformative.
What gets tokenised next that nobody is talking about?
Top of mind for many is tokenised equities. But we still have a lot to do on the cash leg. We have seen tremendous growth in stablecoins, but there is also a lot of experimentation around tokenised deposits and tokenised collateral using money market funds. Those are two I would watch closely. There is a lot of appetite from institutions globally and a lot happening there that will have a tremendous impact on the industry.
Thank you so much for joining us today in Capital Markets, Marius.
