Tokenization will be the next ETF moment in the financial world.

Nick Cherney, Head of Innovation at Janus Henderson Investors, believes that the tokenization of real-world assets (RWA) through Blockchain is not a distant future concept - it is happening right now.

In 1993, the first exchange-traded fund (ETF) was launched. At that time, most people on Wall Street were skeptical about it. Mutual funds dominated the market, brokers held the power, and the idea that investors would flock to buy a new "container" for index investing seemed unrealistic. However, thirty years later, ETFs have fundamentally changed the way people invest globally. There are now over 15,000 ETFs worldwide, managing more than $17 trillion in assets, supporting countless retirement savings, and becoming a core pillar of the financial market. A product that was initially seen as an experiment has now become the industry standard.

Today, we stand on the brink of another revolution that could have far-reaching implications. The tokenization of real-world assets on the Blockchain is not a future thought experiment, but a reality in progress. The core idea is simple and clear: to record traditional financial instruments—bonds, stocks, credit portfolios, etc.—in digital form on a public Blockchain. This endows them with programmability, portability, and instant transfer capabilities. In other words, investors can transfer a U.S. Treasury bond as easily as sending an email.

At Junli Henderson, we do not stand idly by. Last year, we partnered with the infrastructure provider Centrifuge to launch a liquidity government bond fund issued directly on-chain. Within just a few months, the fund's assets under management surpassed $400 million, attracting a large number of investors seeking to move traditional investments onto the blockchain. Building on this success, we further launched our flagship JAAA strategy, which has now rapidly grown to $750 million. This is no longer a theoretical discussion; real investor funds are flowing through new channels.

Certainly, in many corners of the traditional financial sector, skepticism still exists, with controversies centered around issues such as regulation, entrenched old systems, or insufficient investor acceptance. But just ten years ago, even when the trend of ETFs was clearly visible, people still held similar doubts about them. Whenever there is a significant breakthrough innovation in the financial sector, skepticism is often the initial reaction. The fact is that change is not achieved through the gradual alteration of behavior by vested interests; it often progresses slowly and then suddenly erupts comprehensively, until industry giants can no longer ignore this disruption. The world around us is quietly changing, and what was once a niche choice will ultimately become the norm.

Tokenization is different from any previous attempts at financial modernization, as it is not merely a new "packaging" or distribution mechanism, but a completely new infrastructure. The evolution of the infrastructure of global capital markets has been slow and has long been outdated: settlements that could be completed in seconds still take days; costs accumulate through layers of intermediaries; market access is monopolized by a few institutions. Both investors and issuers feel frustrated as a result. Tokenization is precisely the solution that addresses these pain points. By putting assets on the blockchain, investors can achieve instant settlement, unprecedented transparency, and integrate investment products into the decentralized financial ecosystem. Just as mobile technology has spawned entirely new business models and reshaped consumer behavior, blockchain will also give rise to a whole new set of financial paradigms.

Its significance goes far beyond efficiency improvements. Tokenization opens the door to building a more inclusive financial system. Imagine a teacher in Jakarta being able to hold S&P 500 index assets in her digital wallet and using them as collateral to obtain a loan to start a business; or a worker in London being able to seamlessly send interest-bearing micro-payments to family in São Paulo. Tokenization enables financial institutions to serve those who have long been excluded from the traditional financial system, while also allowing existing clients to completely revolutionize the way they interact with assets—in a new era of programmable finance, assets will become more accessible, flexible, and practical.

By providing the technological infrastructure for the issuance, management, and distribution of tokenization funds, Centrifuge's technology enables us to quickly and securely bring these products to market. This collaboration allows a global asset management giant with a 90-year history and $450 billion in assets under management to achieve the speed, transparency, security, and interoperability that only blockchain can offer. This achievement is a strong testament to the impending reconstruction of the global financial system.

The question now is no longer whether tokenization is feasible — its effectiveness is beyond doubt. The real challenge is whether asset management institutions and regulators can act swiftly to seize this historic opportunity, or will they watch idly 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 already mature, its advantages are indisputable, and the momentum has been formed. Traditional financial institutions face a choice: either actively embrace tokenization and shape the next chapter of global finance; or stand by and watch as the transformation occurs in their absence.