Tokenization will be the next ETF moment in finance

Nick Cherney, Head of Innovation at Janus Henderson Investors, believes that tokenizing real-world assets (RWAs) through blockchain isn't a distant future concept—it's happening right now. In 1993, the first exchange-traded fund (ETF) debuted. At the time, most on Wall Street scoffed. With mutual funds dominating and brokers holding sway, the idea that investors would flock to a new "vessel" for index investing seemed far-fetched. Yet, thirty years later, ETFs have revolutionized global investing. With over 15,000 ETFs worldwide, managing over $17 trillion in assets, they support the retirement savings of countless people and have become a core pillar of the financial markets. What began as an experiment has now become an industry standard. Today, we stand on the brink of another revolution with potentially even more far-reaching consequences. The tokenization of real-world assets on the blockchain isn't a futuristic thought experiment; it's a reality happening now. The core concept is simple: record traditional financial instruments—bonds, stocks, credit portfolios, and more—digitally on a public blockchain. This makes them programmable, portable, and instantly transferable. In other words, an investor can move a U.S. Treasury bond as easily as sending an email. At Janus Henderson, we haven't stood idly by. Last year, we partnered with infrastructure provider Centrifuge to launch a liquid Treasury bond fund issued directly on-chain. Within months, the fund surpassed $400 million in assets under management, attracting a significant number of investors seeking to migrate traditional investments onto-chain. Building on this success, we launched our flagship JAAA strategy, which has since rapidly grown to $750 million. This is no longer theoretical; real investor funds are flowing through this new channel. Of course, skepticism persists in many corners of traditional finance, with debate centered on regulation, entrenched legacy systems, or a lack of investor adoption. But even a decade ago, even as the trend toward ETFs became clear, similar concerns persisted. Whenever a major breakthrough innovation emerges in finance, skepticism is often the initial reaction. The truth is, change doesn't happen through gradual behavioral changes by established interests; it often unfolds slowly, then suddenly and fully explodes until industry giants can no longer ignore the disruption. The world is quietly changing around us, and what were once niche options will eventually become the norm. Tokenization is unlike any previous attempt at financial modernization because it's not just a new "package" or distribution mechanism; it's an entirely new infrastructure. The infrastructure of global capital markets has evolved slowly and has long lagged behind the times: settlements, which should take seconds, still take days; costs accumulate due to layers of intermediaries; and market access is monopolized by a small number of institutions. This frustrates both investors and issuers. Tokenization is the solution to these pain points. By putting assets on-chain, investors gain instant settlement, unprecedented transparency, and the ability to integrate investment products into the decentralized financial ecosystem. Just as mobile technology has spurred entirely new business models and reshaped consumer behavior, blockchain will foster an entirely new financial paradigm. The implications extend far beyond efficiency. Tokenization opens the door to a more inclusive financial system. Imagine a teacher in Jakarta holding S&P 500 assets in her digital wallet and using them as collateral to secure a loan to launch her startup; or a worker in London being able to frictionlessly send interest-bearing micropayments to family in São Paulo. Tokenization empowers financial institutions to serve those long excluded from the traditional financial system, while also enabling existing customers to revolutionize how they interact with assets—making them more accessible, flexible, and useful in this new era of programmable finance. By providing the technical infrastructure for issuing, managing, and distributing tokenized funds, Centrifuge's technology enables us to bring these products to market quickly and securely. This collaboration enables a 90-year-old global asset management giant with $450 billion in assets under management to achieve the speed, transparency, security, and interoperability that only blockchain can provide. This achievement is a powerful demonstration of the impending restructuring of the global financial system. The question is no longer whether tokenization is feasible—its effectiveness is undeniable. The real challenge is: can asset managers and regulators act quickly to seize this historic opportunity? Or will they watch as new entrants establish a parallel system that better meets the needs of global investors? The traditional financial industry can no longer wait to be "allowed" to innovate. The protagonist of this epoch-making financial technology revolution is not artificial intelligence, but blockchain. The technology is mature, the advantages are undeniable, and the momentum is already building. Traditional financial institutions face a choice: either actively embrace tokenization and shape the next chapter of global finance, or stand aside and allow change to occur in their absence.