Bank of America (BAC) is well performing the tokenization of real-world assets (RWAs) as the next major evolution in investment products, describing it as "mutual fund 3.0" in a new analyst report. The report, published on September 5, 2025, suggests that the financial industry is at the beginning of a significant shift toward moving traditional assets like stocks, credit, and real estate onto blockchain-based platforms.
According to the report from analysts led by Craig Siegenthaler, investor focus is moving beyond stablecoins and toward the tokenization of RWAs. Tokenization involves creating a digital representation of a tangible asset on a blockchain, a process that enables advantages like 24/7 trading, instantaneous settlement, and fractional ownership of previously illiquid assets.
Bank of America analysts are calling this the start of a "multi-year journey" toward a financial system that operates entirely on-chain.
According to figures from RWA.xyz, the value of RWAs on-chain is now over $28 billion, mostly in private credit and Treasuries. This means that the market for tokenized real-world assets is already big. The tokenized money market funds will probably be the first to use them because they can offer better returns than stablecoins.
This movement is being driven by big banks like BlackRock, JPMorgan, Apollo, and KKR, which are building their own cryptocurrencies platforms. This shift could significantly disrupt traditional banking, impacting core services like brokers' cash sweep programs and transaction services.
The Bank of America report specifically pointed out how vulnerable big banks like Citi are, pointing out that the company's transaction services business makes up about 40% of its bottom line.
However, the analysts also suggested that investors might be "underestimating Citi's expertise and adaptability" in navigating this technological transformation.
The Bank of America report gives strong institutional support for a technology that has been talked about for a long time in the crypto business. The bank shows that tokenization has the ability to completely change asset management and capital markets by describing it as the next big thing after mutual funds and ETFs. This shows that more people in the market agree that blockchain technology will likely be the foundation of the future of finance. It will change more than just digital assets; it will also change how real-world value is owned, traded, and settled.
The fact that big names in finance are actively involved shows that this is not a speculative trend but a planned change that has the potential to completely change old financial systems.