Bank of New York Mellon sees a classic fear-of-missing-out gripping asset managers as they pile into tokenized funds. The custodian bank is watching a surge of interest from traditional fund issuers who are suddenly racing to launch blockchain-based ETFs, worried that waiting could cost them an early foothold in the emerging market for tokenized finance.
FOMO in the boardroom
BNY's observation is blunt: the rush isn't driven by proven demand or clear profitability yet. It's driven by FOMO. Asset managers see peers filing for tokenized products or announcing partnerships with blockchain infrastructure firms, and they don't want to be left behind. The dynamic mirrors past technology adoption cycles in finance — but the speed this time is unusual. Conversations that used to take months are now happening in weeks, according to people familiar with the discussions at BNY.
Tokenized ETFs take shape
Fund issuers are actively exploring how to wrap tokenized assets into ETF structures. The idea is to offer investors exposure to tokenized real-world assets — like Treasuries, private credit, or commodities — through a regulated, exchange-traded vehicle. Several issuers are in early-stage talks with exchanges and custodians, trying to solve the operational kinks: how to price the tokens daily, how to handle redemptions, and how to bridge traditional settlement rails with on-chain transfer.
BNY is positioning itself as the critical plumbing provider for these products. The bank already handles custody for a number of spot Bitcoin ETFs and is betting that the same institutional infrastructure will be needed for tokenized fund shares.
Why the hurry
The fear is that the first-mover advantage in tokenized funds could be decisive. If a major issuer launches a successful tokenized Treasury fund, it could lock in liquidity and investor mindshare that later entrants will struggle to capture. That's the same logic that drove the spot Bitcoin ETF race last year — and now it's spreading to the broader tokenization space.
Timing is everything. The regulatory landscape is still patchy, but the U.S. Securities and Exchange Commission has shown a willingness to approve innovative fund structures when they meet existing rules. Issuers are betting that the window for filings is open now, and they don't want to see a competitor get through first.
What comes next
The next few months will likely bring the first wave of tokenized ETF filings, as asset managers finalize their prospectuses and negotiate with service providers. BNY's observation suggests the pipeline is already full. The unresolved question is whether the SEC will clear these products at the same pace it approved spot crypto ETFs — or whether tokenized funds will face longer review. Either way, the stampede has begun.
