How Institutions Are Being Forced to Tokenize with Theo Golden

Baillie Gifford’s Theo Golden explains how true on‑chain tokenization trims costs, reduces operational risk, and reshapes intermediaries—practical lessons for institutions and market builders.

Key Takeaways

Tokenization cuts costs and settlement times, enabling composability; Baillie Gifford estimates a fully on‑chain US stock fund could save roughly 60 bps, with savings passed to clients.
Native on‑chain issuance (true books of record) reduces counterparty and reconciliation risk; mirror or wrapped models add layers of risk and limited legal recourse.
Intermediaries will be unbundled: transfer agents may become KYC/AML and custody providers, while broker‑dealers shift toward liquidity and distribution roles.
Market microstructure matters—tokenized funds must be tradable with tight spreads; market makers, stablecoins, and liquidity provisioning are critical to eliminate settlement gaps.
Regulators and institutions favor compliant, direct issuance; banks and asset managers can win by self‑disrupting, but implementation requires special permissions and legal design.
On‑chain books reduce human error, improve transparency and capital efficiency, but deployment is complex and must preserve traditional ownership rights and fiduciary duties.

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