Tokenization Will Happen in Waves: How to Position Now

The $19 Trillion Opportunity Nobody Is Timing Correctly

Tokenized assets currently represent approximately $27 to $30 billion — roughly 0.01% of global capital markets. BCG and Ripple project that figure will swell to nearly $19 trillion by 2033. That is not a rounding error. That is a structural transformation of how capital moves, settles, and compounds.

But here is the part most coverage is missing. The question is not whether tokenization happens. The question is which networks capture value at which stage — and whether your firm is positioned for the right phase at the right time. Speaking at EthCC in Cannes during the March 30 to April 2, 2026 conference, Grayscale Head of Research Zach Pandl laid out a phased investment thesis that deserves serious attention from anyone building or advising in the digital assets space.

Here is what Pandl argued, why the sequencing matters, and what it means for fintech founders, fund managers, and compliance teams watching this market develop.

Canton First: Why Institutional Networks Win the Opening Round

Pandl's core argument, as reported by CoinDesk, is that tokenization adoption will not be uniform across blockchain networks. Institutional-grade, permissioned infrastructure wins first — and the data supports that view.

According to Grayscale's April 2026 tokenization report, the Canton Network leads all blockchains with over $348 billion in tokenized asset value as of April 2026. Canton is a privacy-enabled, permissioned network designed specifically for institutional financial workflows. It is not a general-purpose public chain. It is infrastructure built to satisfy the compliance, confidentiality, and counterparty requirements that large financial institutions demand before they move real assets on-chain.

The logic is straightforward. Regulated institutions — asset managers, custodians, broker-dealers — cannot put client assets on infrastructure that lacks access controls, audit trails, and legal clarity. Canton provides those features by design. That is why it has accumulated tokenized asset value that dwarfs every public chain in the current cycle.

The distinction that matters here: Canton's lead is not a sign that permissioned chains win permanently. It is a sign that institutional adoption follows institutional infrastructure — and that phase is already underway.

Phase Two: Where Avalanche and Ethereum Capture the Upside

Pandl's thesis does not stop at Canton. His view, as presented at EthCC, is that public networks — specifically Avalanche and Ethereum — capture more upside in later phases as tokenization matures and regulatory clarity improves.

This sequencing reflects a pattern visible in prior technology adoption cycles. Early adopters in regulated industries require controlled environments. As standards solidify, interoperability demands grow, and the cost of permissioned infrastructure becomes a competitive disadvantage, activity migrates toward open, composable networks.

Why Ethereum and Avalanche Are Phase-Two Candidates

Several structural factors support Pandl's view on public chain upside:

• Composability. Public chains allow tokenized assets to interact with DeFi protocols, lending markets, and automated settlement systems in ways that permissioned networks cannot replicate without significant custom development.
• Network effects. Ethereum's developer base and liquidity depth are unmatched. Avalanche's subnet architecture allows institutions to deploy customized environments while maintaining connectivity to the broader network.
• Regulatory trajectory. As stablecoin legislation and digital asset market structure rules advance in the United States, the legal ambiguity that has kept institutions on permissioned rails is beginning to resolve.

Tokenized assets have grown 217% year-over-year as of Q1 2026. That growth rate, sustained at even a fraction of its current pace, will eventually pressure institutions to access liquidity and composability that only public networks provide.

What This Means for Fintech Founders and Fund Managers

Pandl's phased framework is an investment thesis, not a regulatory roadmap. But it carries direct implications for fintech founders building tokenization infrastructure and fund managers allocating to digital assets.

For Founders Building Tokenization Products

First, understand which phase your product serves. A tokenization platform targeting institutional fixed-income issuers is a Phase One product. It should be designed for permissioned environments, with compliance workflows, KYC/AML integrations, and audit capabilities built in from day one — not bolted on later. A platform targeting retail access to tokenized real-world assets is a Phase Two or Phase Three product. The regulatory and technical requirements are fundamentally different.

Second, fintech compliance is not optional at any phase. Whether you are building on Canton, Avalanche, or Ethereum, the underlying assets being tokenized — securities, fund interests, real estate — carry existing regulatory obligations. Tokenizing a security does not change its status as a security. SEC registration requirements, broker-dealer obligations, and investment adviser rules apply regardless of the blockchain layer.

For Fund Managers Allocating to Digital Assets

Third, the 0.01% penetration figure is the most important number in this analysis. Tokenized assets at $27 to $30 billion represent a market in its earliest innings. The BCG and Ripple projection to $19 trillion by 2033 implies a roughly 630-fold increase from current levels. Managers who wait for consensus will miss the asymmetric entry point.

Fourth, network selection is a portfolio decision, not just a technical one. Pandl's phased view suggests that Canton exposure today and Ethereum/Avalanche exposure as regulatory clarity improves is a more sophisticated allocation than simply buying the largest public chain by market cap.

The Compliance Layer That Tokenization Cannot Skip

The enthusiasm around tokenization is warranted. The 217% year-over-year growth in tokenized assets is real. The institutional participation on Canton is real. But the compliance infrastructure required to operate in this space is frequently underestimated — and that gap creates legal exposure for founders and fund managers alike.

Several compliance questions arise at every layer of a tokenization product:

• Securities classification. Does the tokenized asset constitute a security under the Howey test? If so, what exemption or registration pathway applies?
• Money transmitter licensing. Does the platform's transfer mechanism trigger state money transmitter license requirements? The answer varies by state and by the specific mechanics of how tokens move between wallets.
• Investment adviser obligations. If the platform provides any form of investment advice or discretionary management over tokenized assets, Investment Advisers Act registration may apply.
• Terms of service and privacy policy. User-facing tokenization platforms require carefully drafted terms of service and privacy policies that address the specific risks of on-chain asset transfers, smart contract failures, and irreversible transactions.

The real question is not whether tokenization will reach institutional scale. It will. The real question is whether the legal infrastructure surrounding your product is built to survive the regulatory scrutiny that scale will inevitably attract.

Key Takeaways

• Tokenization is a phased adoption story, not a single event. Pandl's framework — permissioned networks first, public chains later — reflects how regulated industries have adopted every prior wave of financial technology.
• Canton's $348 billion in tokenized asset value is a leading indicator, not a ceiling. It demonstrates that institutional demand for tokenized assets is real and already moving at scale, even before public chain infrastructure matures.
• The 0.01% penetration figure is the most important data point for investors. Tokenized assets at $27 to $30 billion against a global capital market of hundreds of trillions represents an entry point that will not persist as regulatory clarity improves.
• Fintech compliance obligations attach to the underlying asset, not the blockchain layer. Founders building tokenization products must address securities law, money transmitter licensing, and investment adviser obligations before they reach institutional scale — not after.
• Network selection is a strategic decision with legal consequences. Choosing between permissioned and public infrastructure affects not just technical architecture but regulatory exposure, counterparty requirements, and long-term product positioning.