Tokenized real-world assets — funds, securities, cash instruments — have moved past the proof-of-concept stage. But they're not taking off. Franklin Templeton's Chetan Karkhanis points to a stubborn bottleneck: fragmented standards across Layer 1 blockchains and interoperability systems that keep the market from scaling.
Fragmented standards
Karkhanis, who oversees digital asset strategy at the $1.6 trillion asset manager, says the lack of common technical rails is the main structural barrier. Different L1s use different token standards. Interoperability layers add another layer of complexity. That fragmentation makes it hard for institutions to issue a single tokenized product that works across multiple chains — or for investors to move assets between ecosystems without friction.
The problem isn't new, but it's become more visible as more financial institutions push into tokenized offerings. Banks, asset managers, and exchanges have all launched pilots or live products this year. Yet each tends to live inside its own blockchain silo.
Still waiting for takeoff
Despite the hype — and real progress on the tech side — tokenized assets haven't achieved the breakout moment many predicted. Karkhanis's analysis suggests the market is stuck in a chicken-and-egg loop: without a unified standard, liquidity stays fragmented; without liquidity, issuers hesitate to commit fully.
Franklin Templeton itself has been active in the space, running a tokenized money market fund on multiple chains. But even that product, one of the more visible examples, hasn't sparked a wave of copycats at the scale some expected.
Karkhanis also examined potential catalysts that could push adoption forward — though the public analysis doesn't name specific triggers. The implication is clear: until the industry agrees on how tokens talk to each other, tokenized RWAs will remain a collection of promising pilots rather than a unified asset class.
