How $100B Asset Managers Are Making Tokenized Funds a Reality | Maredith Hannon of WisdomTree

Episode Summary

Executive Summary: Meredith Hannon explains WisdomTree’s rapid expansion into tokenized funds, arguing that blockchain is becoming a mainstream distribution and ownership rail for regulated financial products. She says growth has accelerated sharply in 2025, driven by yield-seeking crypto-native users, institutional treasury use cases, and improving UX that hides blockchain complexity while preserving on-chain ownership and utility.

Main Topics: Tokenized funds are moving from theory to adoption (Priority: 5/5): Hannon says tokenization has shifted from proof-of-concept to real usage, with 2025 marking a major inflection point in adoption and product demand. WisdomTree’s strategy: regulated products on-chain (Priority: 5/5): The firm is positioning tokenization as an extension of its ETF/ETP business, using regulated 40 Act structures and blockchain as a better delivery mechanism. User experience and custody on chain (Priority: 4/5): WisdomTree is trying to make tokenized investing feel like a normal app while still enabling users to hold assets in their own wallets and transfer them peer-to-peer. Private credit and yield as early demand drivers (Priority: 4/5): Early adoption is being led by crypto-native investors and institutions seeking yield, liquidity, and exposure to traditional assets without leaving on-chain ecosystems. Liquidity, secondary markets, and market structure evolution (Priority: 4/5): The conversation covers how tokenization may push fund liquidity closer to faster settlement and more flexible redemption models, though true secondary markets are still developing. Identity, KYC, and interoperability (Priority: 3/5): Hannon argues blockchain can reduce repeated KYC friction through wallet tagging and identity reuse, creating a more interoperable financial ecosystem. Broader future use cases beyond investing (Priority: 4/5): She sees tokenization enabling payments, collateral, treasury management, and other DeFi integrations that expand what capital can do day to day.

Key Arguments: Tokenization is following an early-ETF-style adoption curve, but the pace is faster because users already live on chain and want products where they are. WisdomTree’s tokenized funds are built as regulated U.S. 40 Act products, because investor protection, bankruptcy remoteness, and transparency matter as much as new technology. The biggest near-term growth drivers are yield, then access, and ultimately utility; utility will be the largest long-term driver because tokenized assets can be used, not just held. Crypto-native users are often early adopters because they want stable, transparent, yield-bearing assets without selling crypto and re-entering traditional brokerage rails. Tokenization improves the investor experience by making ownership portable, settlement faster, and access simpler, while keeping blockchain complexity in the background for mainstream users. The future of financial services may involve reusable identity/KYC and cross-platform wallet tagging, reducing onboarding friction across asset managers and banks. Liquidity expectations are likely to rise as tokenized products mature, pushing parts of the market toward faster settlement and potentially 24/7 access, though not every fund will move that direction.

Data Points: Tokenized fund AUM at WisdomTree: $750 million - Meredith says this is predominantly in the firm’s money market fund. YoY / period growth: Almost 5x incremental growth - Growth from last year to this year, especially in 2025. Number of tokenized funds: 15 funds - WisdomTree offers a suite of tokenized funds across multiple blockchains. Retail app minimum: $1 - WisdomTree Prime allows very low minimum investment access for U.S. retail users. Highest minimum mentioned: $25 - She notes the highest minimum across some offerings in the app. Transaction settlement: Less than 10 seconds - Some on-chain transactions in WisdomTree Prime settle extremely quickly. Private credit yield range: 10%–12% - She describes the tokenized private credit product as yielding around this range. Alternative yield examples: 3.5%, 5%, 11% - Used to contrast money market-style yields with higher-yielding tokenized products. Money market settlement: T+0 subscriptions and T+0 redemptions - Presented as the model WisdomTree wants to extend to more products. Private credit liquidity example: T+0 subscriptions, T+2 redemptions - She described the liquid private credit fund’s operational mechanics. Underpinning of private credit fund: Over 30 underlying holdings - The fund is structured as a fund-of-funds with exposure to BDCs, PDCs, and closed-end funds. ETF historical reference: 1993 launch of SPY - Used to compare tokenized funds to the early ETF era. ETFs reached $1 billion AUM: Two years after launch - Mentioned as a benchmark for ETF adoption speed. Investor reach: Over 100 million users - Referenced in relation to Coinbase as evidence of crypto-native demand.

Pivotal Quotes: "If you don't understand where the yield is coming from, you may be the yield." — Meredith Hannon: She uses this to warn listeners about opaque or excessively high crypto-native yield products and to emphasize transparency. "It's not about the technology, but about the end investor experience." — Meredith Hannon: She argues tokenization will mature when users stop focusing on blockchain mechanics and focus on better access, settlement, and utility. "This isn't just about, okay, this is the same money market fund that I have in my brokerage account that now I can access on chain. It's about I could pay with a money market fund." — Meredith Hannon: She describes tokenization as a utility expansion, not just a packaging change.

Implications: Tokenized funds may become a major new distribution rail for regulated assets, with faster settlement, reusable identity, and broader utility. If adoption continues, financial services could shift toward interoperable wallets, on-chain cash management, and more liquid alternative investments.