Wall Street Banks View Tokenization as a New Growth Opportunity, Not a Threat

Table of Contents

• You might want to know
• How major banks are approaching tokenization
• Key insights table
• Afterwards...

You might want to know

• Could tokenization create new revenue opportunities for traditional banks rather than displace them?
• How might blockchain-based assets change trading, international payments, and the need for financial advice?

How major banks are approaching tokenization

Tokenization—the process of representing financial or real-world assets on a blockchain—has become an increasingly prominent topic across financial markets. Companies are exploring or introducing tokenized versions of instruments such as equities, bonds, and commodities. These products may be transferable around the clock and, in some cases, across geographic boundaries with fewer restrictions than conventional systems. The technology has attracted attention from Wall Street’s largest banks, but their recent comments suggest that they see it less as an immediate threat and more as a possible way to develop existing businesses.

Goldman Sachs (GS), Wells Fargo (WFC), and Morgan Stanley (MS) have emphasized different potential applications. Goldman Sachs has focused on trading and the possibility that tokenization could generate more products and activity. Wells Fargo has highlighted the use of tokenized deposits to move money across borders. Morgan Stanley has pointed to the implications for wealth management, arguing that faster asset transfers may make professional advice more valuable rather than less necessary.

Executives discussed these themes during the banks’ third-quarter earnings calls. Their remarks offered a clearer sense of how they view the emerging business, although none of the banks provided a revenue estimate for tokenization. The opportunities they described remain at different stages of development, and some are still exploratory.

For Goldman Sachs, the central question is whether new systems such as tokenization, decentralized finance (DeFi), and prediction markets could reduce the firm’s trading revenue. CEO David Solomon suggested that these developments could instead expand the market. He compared the current transition with the move toward electronic stock trading almost 50 years ago. At the time, electronic trading prompted concerns about what it might mean for traditional Wall Street trading desks. Goldman adapted, and its equities business grew.

Solomon sees a possible parallel in tokenization. He said the technology could support more products, greater activity, new clients, and broader distribution channels. If assets become easier to issue and trade, the range of transactions and services available to market participants could grow. In that view, tokenization would not simply shift existing activity from one venue to another; it could also help create additional forms of business for institutions equipped to serve them.

Goldman has been developing digital-asset infrastructure for several years, although it has done so less publicly than some competitors. The firm built GS DAP, its platform for tokenized assets, as long ago as 2022. Its work has included tokenizing bonds, money market funds, and real estate. These efforts show that the bank’s interest is not limited to broad predictions about blockchain: it has also invested in systems and explored asset categories that might use the technology.

In July, Goldman took part in a half-day run of a tokenization service from the Depository Trust & Clearing Corporation (DTCC). The DTCC performs important operational functions for U.S. securities markets and processes quadrillions of dollars of transactions each year. Goldman is now considering how the service might be used at a larger scale. Solomon said tokenization could help lower costs, automate transactions, and make assets easier to trade. However, he also made clear that current activity is limited. “The activity so far is small and at the margin,” he said.

Wells Fargo has described a more immediately operational use: cross-border payments using tokenized deposits. Chief Financial Officer Michael Santomassimo said the system is already in production and can deliver money to beneficiary accounts in two minutes or less. He also stressed that the service is still handling small volumes. The example illustrates how a bank can use tokenization to test a practical payment application while acknowledging that its present scale remains modest.

For Wells Fargo, the potential benefit may be particularly relevant to international reach. The bank does not have a large international branch network compared with some global rivals. Tokenized deposits could allow it to compete for more cross-border payment business without first building a similarly extensive physical network. This is a strategic possibility rather than a claim that the bank has already achieved a large expansion in international payments.

The bank has also identified other possible applications, including tokenized securities, real-world assets, and crypto trading for wealth clients. Santomassimo did not give a launch schedule for those services. As a result, these areas should be understood as potential directions under consideration, rather than products with announced availability dates.

Morgan Stanley’s comments focused on wealth management and client needs. The firm has been investing in digital capabilities across its wealth management and institutional securities businesses. Chief Financial Officer Sharon Yeshaya said that making it faster and easier to move assets does not mean that clients will no longer need professional guidance. In her view, the ability to transfer assets more readily may increase the need for advice as investors navigate a wider range of choices and manage their portfolios.

Yeshaya did not announce a new tokenization product. Instead, she described the technology as another opportunity for Morgan Stanley. The distinction is important: the firm is identifying a possible strategic direction, not reporting a specific service launch or measurable financial contribution. Its perspective also differs from Goldman’s emphasis on trading and Wells Fargo’s focus on payments. Morgan Stanley is asking what greater asset mobility could mean for the advisory relationship.

Taken together, the three banks present tokenization as a technology with several potential points of connection to established financial services. It could support the creation and exchange of digital representations of assets, enable new payment pathways, and change how quickly clients can reposition investments. The firms’ public comments do not establish that these possibilities will become large businesses, and the limited activity described by executives highlights the gap between experimentation and broad adoption.

The banks’ approaches also suggest that adoption may not follow a single path. Goldman’s investments in GS DAP and its work with the DTCC relate to trading infrastructure and asset handling. Wells Fargo’s production payment system demonstrates a narrower, practical application, while its other proposed services remain undated. Morgan Stanley’s comments focus on how technology may affect client relationships and the demand for advice. Each institution is assessing tokenization through the needs and capabilities of its existing business.

There are clear reasons for caution alongside the potential benefits. A technology may make certain processes faster or more automated, but successful implementation also depends on infrastructure, operating arrangements, market participation, and the development of services clients are willing to use. The figures and statements shared by the executives do not quantify future revenue or establish how quickly adoption will grow. For now, the most grounded conclusion is that major banks are testing where tokenization may complement their current activities.

Key Insights Table

Afterwards...

The next stage for tokenization will depend on whether financial institutions can move beyond experimentation and demonstrate reliable, useful services at a broader scale. Goldman Sachs, Wells Fargo, and Morgan Stanley are looking at distinct parts of the financial system, so progress may appear first in trading infrastructure, payments, or client services rather than everywhere at once.

For now, their message is measured: tokenization may change how assets are issued, transferred, and advised on, but it has not yet been presented as a proven source of substantial revenue. If adoption expands, the banks’ existing strengths could help shape how the technology develops. Whether it becomes a major growth engine will depend on real-world use, not simply on the promise of faster or more flexible transactions.

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