S&P Dow Jones Indices (S&P DJI) is in discussions with major exchanges, custodians and DeFi protocols to license and list tokenized versions of its benchmarks, according to Stephanie Rowton, the firm’s director of US equities.
Rowton told Cointelegraph that the index provider is taking a “strategic approach” to ensure tokenized S&P products are launched only on platforms that meet high standards for transparency, security and regulatory compliance.
“By establishing these types of relationships, we hope we can work together to participate in a robust infrastructure that supports the trading and accessibility of tokenized versions of our indexes, ultimately enhancing the investor experience,” she said.
The push into blockchain comes as institutional interest in tokenized financial products accelerates. S&P DJI entered the space earlier this year by licensing the S&P 500 for a tokenization initiative with Centrifuge, which uses official data to offer programmable index-tracking funds via smart contracts.
Rowton said the move has already generated “an uptick in curiosity and engagement” from both traditional finance (TradFi) and decentralized finance (DeFi) market participants. “This interest reflects a broader market trend as investors increasingly seek innovative and efficient ways to interact with established financial products,” she added.
Related: Ex-Binance dealmaker joins Hilbert Group to launch tokenized funds platform
Bridging TradFi and DeFi
Rowton said the blockchain technology has a “transformative potential” in the financial markets. “As demand for digital assets grows, tokenization could play a crucial role in bridging the gap between traditional finance and decentralized finance,” Rowton noted.
She added that the S&P DJI’s tokenization strategy aligns with the firm’s mission to meet the needs of “a new generation of investors who are looking for innovative ways to engage with established benchmarks.”
Interest in tokenized index products is strongest among digitally native investors, including crypto and blockchain participants, as well as institutions seeking to diversify portfolios. Regionally, Europe, Asia and LatAm lead the charge.
Rowton also revealed that the company is evaluating opportunities to tokenize other flagship benchmarks such as the Dow Jones Industrial Average and thematic indexes. “We recognize that different investor segments may have varying interests in specific indexes, and we will aim to respond to market demand accordingly,” she said.
Related: Animoca launches NUVA marketplace to unify ‘fragmented’ RWA sector
2030 vision for tokenized indexes
Rowton said tokenized indexes would be “pivotal” in global markets by 2030, enhancing cross-border market access and liquidity. The technology could lower traditional investment barriers, while enabling new strategies that leverage DeFi features like fractional ownership and automated trading.
However, she pushed back on the notion that tokenization threatens S&P DJI’s traditional licensing business. Instead, she described it as “a complementary innovation” that expands commercial opportunities and opens index investing to new audiences without compromising the integrity of the benchmarks.
Rowton’s comments come as tokenized stocks continue to gain momentum, with market capitalization for blockchain-based financial products hitting $370 million by the end of July.
Last week, OpenEden partnered with BNY Mellon to manage and custody the assets behind its tokenized US Treasury product, TBILL, the first Moody’s “A”-rated tokenized Treasury fund to use a global custodian.
Magazine: Will Robinhood’s tokenized stocks REALLY take over the world? Pros and cons
Be the first to comment