We were honored to serve as part of the tokenization panel discussion at this year’s AIMA Digital Assets conference. We were also intrigued to notice a central theme that emerged early and persisted throughout the session: tokenization is less about creating new assets and more about re-engineering how markets function.
While much of the public narrative around digital assets is still dominated by speculative trading of crypto assets, the institutional conversation has moved toward a more fundamental question: what problem is tokenization actually solving?
Across the panel, there was broad alignment that liquidity remains the “holy grail” tokenization is attempting to address.
Tokenization promises to increase liquidity not simply by digitizing ownership, but by enabling more efficient secondary markets, broader distribution channels and reduced friction in transfers of ownership. However, the discussion clarified liquidity does not materialize solely by putting assets on-chain. It must be built deliberately through market infrastructure, regulatory clarity and participant adoption. In other words, tokenization can enable liquidity, but it cannot manufacture it in isolation.
This distinction is critical. Many early tokenization efforts have failed to gain traction precisely because they focused on the technology layer without solving for market structure. Specifically, those efforts have neglected to ensure the presence of active buyers and sellers who have confidence they are operating in a regulated environment and that the investment was worth it.
A recurring theme, consistent with how institutional participants are approaching the space, is that tokenization should be viewed as infrastructure rather than a standalone product.
One of the most compelling use cases discussed was expanding access to private markets. As private companies continue to stay private longer, investors, particularly retail and international investors, are increasingly seeking exposure to assets that have historically been difficult to access. Tokenization offers a potential solution by:
The panel highlighted that fractionalization is not just about affordability — it is about distribution efficiency. While fractional shares already exist in public markets, tokenization extends this model to asset classes where ownership structures have traditionally been more rigid and opaque. This is particularly relevant for international investors, who often face structural barriers when attempting to access U.S. private markets. Tokenization has the potential to compress those barriers, though regulatory considerations remain a key gating factor.
Perhaps the most forward-looking insight from the discussion was the idea that tokenization is gradually dissolving the historical boundary between public and private markets.
Traditionally, public markets offered liquidity and broad access, but limited growth upside post-IPO. Private markets offered early stage access and higher return potential, but limited liquidity and accessibility. Tokenization introduces the possibility of a hybrid market structure, where private assets can trade in more dynamic secondary environments, ownership can be fractional and continuously transferable, and access is expanded without requiring a traditional IPO.
Another key takeaway was that distribution is as important as infrastructure. Even the most well-designed tokenized product will fail without proper investor alignment. As one panelist noted, the challenge is not just to tokenize assets, but to get the product into the right hands.
This highlights a broader institutional priority: ensuring tokenized offerings are designed with end investors in mind, rather than simply leveraging technology for its own sake.
Tokenization is often described as transformative, but its success will depend less on technological capability and more on market design. Liquidity, access and efficiency are not abstract benefits. They are outcomes that must be engineered through robust infrastructure, investor alignment and thoughtful product design.
The opportunity is significant: a more accessible, efficient and interconnected capital market ecosystem. But the industry remains in a transitional phase, moving from proof of concept to real-world implementation. The next stage of tokenization will not be defined by new ideas, but by execution at scale.
Contact Mike Dellavalle or a member of your service team to discuss this topic further.
In this blog Cohen & Co is not rendering legal, accounting, investment, tax or other professional advice. Rather, the information contained in this blog is for general informational purposes only. Any decisions or actions based on the general information contained in this blog should be made or taken only after a detailed review of the specific facts, circumstances and current law with your professional advisers.