Stablecoins maintain an advantage due to their rapid integration into wallets, exchanges and DeFi.
The bank called tokenized funds products with a “structural regulatory disadvantage.”
Stablecoins continue to largely dominate the cryptocurrency market despite the growth of tokenized monetary funds, a category that has gained attention for offering returns on digital assets backed by traditional financial instruments. This was concluded by JPMorgan in a report released on May 21, where it estimated that these funds currently represent only around 5% of the total universe of stablecoins.
For the bank, the difference does not respond solely to a question of profitability. in the studiopointed out that stablecoins have established themselves as the main liquidity tool within the cryptocurrency ecosystem thanks to their daily use in trading operations, international payments, collateral management, settlements and fund management both in centralized exchanges and in decentralized finance protocols.
In contrast, tokenized money market funds still face obstacles limiting their expansion. JPMorgan explained that these products carry a “structural regulatory disadvantage” because they are considered financial securities, which subjects them to registration, disclosure, reporting and transfer requirements that reduce their ability to circulate freely within the network infrastructure.
The reportprepared by analysts led by Nikolaos Panigirtzoglou, warned that, even if they continue to grow at a higher rate than stablecoins due to their ability to generate interest, it is unlikely that they will be able to surpass 10% to 15% of that market without significant regulatory changes.
The entity believes that the cryptocurrency ecosystem continues to favor assets that can be quickly and frictionlessly integrated into trading platforms, wallets and decentralized applications. That operational advantage has allowed stablecoins to maintain a dominant position, even though tokenized funds promise benefits such as near-instant settlements, permanent transfers, automation of regulatory compliance, and more efficient collateral management.
JPMorgan also indicated that The current demand for these funds is mainly concentrated in two groups: investors linked to the cryptocurrency market seeking returns on idle capital and institutions interested in combining network programmability with traditional financial protection mechanisms.
While the bank acknowledges that the tokenization of traditional financial instruments continues to advance, it also highlighted that risks associated with liquidity, exposure to counterparties, regulatory uncertainty and stability of underlying assets continue to pose a challenge to broader adoption.
On the other hand, there are other entities that consider the role of tokenization as important within the financial system. Among them is Larry Fink, the CEO of BlackRock, who stated that tokenization can transform global financial infrastructure by allowing traditional assets such as stocks, bonds or funds to be traded over networks more quickly, transparently and efficiently. As explained in statements collected by CriptoNoticias, the executive believes that this technology has the potential to democratize access to investments that were historically limited to large institutions or high-net-worth investors.
Finally, the discussion does not seem to focus solely on which instrument offers greater performance, but on which has a broader and more efficient utility within the real infrastructure of the cryptocurrency ecosystem.