JPMorgan on tokenization: likely to reshape ETFs, faster settlement but years away

JPMorgan’s global head of ETF product, Ciarán Fitzpatrick, says tokenization could reshape the funds industry over the coming years, including exchange-traded funds (ETFs). Fitzpatrick argues that tokenization use cases may still be “a couple of years away,” citing firms testing tokenized ETFs because the model could improve creation and redemption. He highlighted potential benefits such as near-instant settlement and access beyond normal market hours (around-the-clock functionality for some products). JPMorgan is already studying tokenization through Kinexys, its blockchain unit, to explore how blockchain can support financial markets and settlement systems. The bank’s stance suggests adoption will likely expand through validated, practical deployments rather than immediate, broad rollout. The article also notes growing regulator and exchange interest in tokenization. SEC Commissioner Hester Peirce has urged companies to engage directly with the SEC on tokenized products. Separately, the SEC has approved some tokenization-related efforts, including a Nasdaq rule change for tokenized share trading. Large players, including the New York Stock Exchange, Robinhood, Kraken, and Coinbase, are reported to be working on tokenized equity offerings. For traders, this is a narrative-positive signal for tokenization in traditional finance, but near-term market impact appears limited because “good use cases” are not expected immediately.