Finance leaders from BlackRock’s Larry Fink to Robinhood’s Vlad Tenev have displayed enthusiasm for tokenization, a term for representing real-world assets as tokens on the blockchain. But despite the excitement, roughly 78% of tokenized assets remain only as “wrappers,” or receipts for assets that primarily operate off-chain, according to a new report from crypto asset manager Pantera.
The report scored 542 tokenized assets on a scale from wrapper, where a token represents a claim on an offchain asset held by a custodian, to native, where issuance, redemption, and custody all happen fully onchain. The study found 77.6% of assets fell into the category of wrapper.
The data offers a reality check for the tokenization space, where major financial institutions including BlackRock, Franklin Templeton, and JPMorgan have made plays. Despite the encouraging uptake, most tokenization projects are creating blockchain representations of traditional assets such as Treasury bills, but failing to capture the full potential benefits of on-chain technology.
“For many institutions, [wrappers] are a practical first step because they fit familiar compliance and operating models while improving distribution and access,” the report’s authors Franklin Bi, Ally Zach, and Danning Sui wrote. “But they do not fully unlock what makes blockchains distinct. The biggest gains come when assets become more natively on-chain and can move, settle, and integrate more fluidly across the system.”
The report likened the current state of tokenization to the early 2000s era when media companies sought to harness the Internet to extend their reach, but failed to capture the full potential of the web, resulting in them simply posting PDFs online that lacked links, search or other common web features.
“Tokenization is in its newspaper-on-a-website phase. The $321 billion market has proven that assets can be distributed on-chain. It has not yet produced the native financial instruments that will define what tokenization actually becomes: programmable compliance, autonomous collateral management, real-time yield optimization, embedded governance, unbundling of assets into risks and revenue streams. Those products cannot be wrapped from off-chain originals. They have to be originated on-chain,” the report stated.
A need for CLARITY
Despite the growth of the tokenization sector—Pantera counted 168 new tokenized assets launched in 2025—stablecoins still make up 91.6% of the total market value for tokenized assets, Pantera said. The report only labeled 55% of stablecoins as wrappers, showing more maturity for the sector compared to other kinds of tokenized assets.
Among all tokenized asset classes—which ranged from stablecoins to real estate—the area that consistently scored near the bottom on Pantera’s tokenization progress index was issuance and redemption. 91% of tokenized assets still require gated issuance and redemption of assets, according to the report. A lack of clear regulation for tokenized assets may be to blame, Pantera notes, calling the wrapper market a “rational output of a market where compliance still assumes intermediary-controlled processes.”
DeFi supporters hoping to see more crypto nativity from tokenization projects may have good news on the horizon with recent progress being made on the CLARITY Act. The law would create a regulatory regime for crypto—and may offer firms the legal cover to make more ambitious experiments in tokenization.
“We consistently hear from the world’s leading banks and asset managers that tokenization is their primary focus for the next five years,” Pantera general partner Franklin Bi told Fortune. “There’s a shared realization that the global financial system is migrating toward blockchain rails or infrastructure that is inherently global, programmable, and open. No major institution wants to be left behind in this transition.”
This story was originally featured on Fortune.com