Tokenization and the reshaping traditional finance: institutional adoption

Abstract

This paper examines the growing institutional adoption of tokenization. Drawing on examples such as BlackRock’s BUIDL fund, we show how traditional financial institutions are experimenting with blockchain-based issuance, settlement, and custody models. We also outline the lifecycle of a hypothetical tokenized bond and demonstrate how it employs smart contracts and data oracles at each stage of the process. The paper contributes to current discussions by explaining how tokenization interacts with existing financial infrastructure and by identifying areas in which tokenization may influence market structure and regulation.