NYLIM was the latest entrant in the list of asset management giants to take steps into tokenization, teaming up with Centrifuge (CFG) to bring one of its high-yield corporate bond strategies on-chain.
For NYLIM, tokenization is less about launching blockchain versions of existing funds than about improving how portfolios are assembled.
Sy said customized investment strategies often combine ETFs, bonds, private credit and other assets, creating operational complexity that makes personalization difficult to scale.
“The ultimate goal is to embed the customization in the asset itself, rather than the customization around the operations around the various assets,” he said.
Tokenization can also streamline transfer agency, settlement and other back office processes, reducing costs that ultimately benefit investors.
“If you can get it down by 10% or 20%, that’s a better outcome for our customers,” Sy said.
DeFi awaits
Sy said that stablecoins have become the first practical bridge to bring traditional financial institutions onchain.
The stablecoin market has grown to over $300 billion and is increasingly used for cross-brer payments
As banks, payments companies and fintechs adopt stablecoins for cross-border payments and financial management, many will eventually look for institutional-grade tokenized assets where these balances can earn returns instead of remaining in cash.
“Stablecoins were probably one of the biggest unlocks in the last two years,” Sy said. “Adopting stablecoins was the gateway to getting them onchain.”
