By Gabor Gurbacs, CEO, OpenAssets
There’s a version of the tokenization story that goes: one day, all financial infrastructure moves fully on-chain, intermediaries dissolve, and capital markets become a global, permissionless network. It’s a compelling vision. It’s also not how markets actually change.
Markets don’t rip out working infrastructure. They layer on top of it, slowly, until the new layer becomes load-bearing and the old one quietly retires. That’s how we got from floor trading to electronic execution. It’s how we got from phone orders to algorithmic market-making. And it’s how tokenization is actually going to happen. Not as a revolution, but as what I’ve started calling Web 2.5.
Web 2.5 is the bridge. It’s the architecture that lets institutions plug blockchain rails into existing workflows without rebuilding everything from scratch. Settlement systems, custody relationships, compliance infrastructure; none of it needs to disappear for tokenization to deliver real value. It needs to interface. The institutions that understand this are already moving. The ones waiting for a fully on-chain world to arrive before they engage are misreading the timeline entirely.
The blockchain needs to get smarter, not heavier
One of the persistent debates in institutional tokenization is how much information belongs on-chain. The answer the industry has been gravitating toward (put everything on-chain, build transparency into every layer) is operationally impractical and, more importantly, unnecessary.
What financial blockchains actually need is selective, high-value embedded data. Origin. Destination. Asset characteristics that matter for compliance. The minimum viable information set that allows the chain to enforce the rules that regulators and counterparties require. Full identity on-chain isn’t the goal, programmable compliance is. The difference matters enormously for adoption, because the institutions that need to move first are the ones with the most to lose from data exposure.
Not everything belongs on-chain, and that’s fine
Here’s a position that tends to surprise people in the more crypto-native corners of this conversation: the future of institutional finance is not a fully on-chain financial stack. It’s a hybrid one.
Institutions will keep batching. They’ll keep netting. They’ll keep handling parts of workflows off-chain because off-chain processing is faster, cheaper, and better suited to certain operations than any chain running today. The question isn’t on-chain versus off-chain. It’s designing the right boundary between them and building infrastructure that manages that boundary cleanly, without friction, without compliance gaps, and without forcing operations teams to become blockchain engineers to function.
Where the real unlock is
The efficiency gains from tokenization are real and significant. Cost reduction in issuance, settlement, and distribution is measurable, not theoretical. But efficiency is not the headline.
The headline is access. Tokenization’s most consequential capability is reducing distribution costs to the point where financial products become economically viable to offer to markets and investors that legacy infrastructure simply cannot serve. The math that makes a retail bond offering impossible in Southeast Asia today becomes different when issuance costs compress by an order of magnitude. The investor in a market with no brokerage infrastructure becomes reachable when distribution is a digital wallet.
That expansion of the addressable market, not the basis point improvement in settlement cost, is why this matters at a structural level.
Compliance is a feature, not a constraint
One observation from the front lines that rarely makes it into polite institutional conversation: crypto-native firms have quietly built KYC, KYB, and transaction monitoring capabilities that outperform what many traditional financial institutions operate. Not because crypto firms are inherently more compliance-minded, but because they had to build from scratch at a moment when the tooling had improved dramatically, and because their regulatory exposure demanded it.
This has a practical implication. The compliant tokenized asset distribution infrastructure being built now is not a compromise between blockchain capability and regulatory requirement. It’s an opportunity to build something better than what exists in either world, by combining programmable enforcement with modern compliance tooling that the legacy stack was never designed to support.
The last bottleneck
Raw blockchain capability is not what’s holding institutional tokenization back. What’s holding it back is user experience; that is, the gap between what the infrastructure can do and what an operations team, a portfolio manager, or an end investor can actually interact with without friction.
The tokenization platforms that break through at scale will be the ones that hide the complexity entirely. The blockchain becomes invisible. The compliance layer runs in the background. The user sees a clean interface that behaves like every other institutional tool they already use and happens to settle in seconds, reach global markets, and operate around the clock.
The teams solving this engineering problem are building the market infrastructure that institutional finance will run on for the next generation.
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Gabor Gurbacs is a Wall Street–trained strategist and technology entrepreneur with deep expertise in digital assets and tokenized markets. He previously led digital asset strategy at VanEck, helped pioneer industry-standard crypto indices, and advised institutions and regulators globally on market structure. Today, he leads OpenAssets as CEO in building the next generation of financial infrastructure.
