ETF executives expect tokenised funds to gain significant market share within three to five years, but regulatory uncertainty, parallel operating models and custody changes remain the main barriers to commercial adoption.
The exchange-traded fund (ETF) industry has largely moved beyond debating whether tokenisation will transform asset management. Instead, discussion is now focused on how regulators, market infrastructure providers and asset management companies can make it happen as quickly as possible. According to Acuiti’sETF Management Insight Report: Q3 2026, senior executives from ETF issuers, banks, proprietary trading firms and institutional investors expect tokenised ETFs to become a significant part of the market within the next three to five years. Despite this widespread optimism, however, regulatory uncertainty remains the greatest obstacle preventing companies from progressing beyond pilot projects to commercial products. (Source: Acuiti,ETF Management Insight Report: Q3 2026; reported by Markets Media; published: 13 July 2026.)
The findings highlight how rapidly the discussion surrounding tokenisation has evolved. Only a few years ago, understanding of blockchain was largely confined to cryptocurrencies. Today, some of the world’s largest asset managers, exchanges and market infrastructure providers are investing heavily in tokenised funds, digital securities and blockchain-based settlement systems, viewing them as a means of reducing operating costs, accelerating settlement and modernising financial markets.
Regulation Replaces Technology as the Main Bottleneck
Technology is no longer regarded as the greatest challenge. Survey respondents broadly identified regulation as the principal obstacle to launching tokenised ETFs. The industry’s main concerns centre on the following areas, while the technology itself is considered relatively less problematic:
Legal uncertainty: as fund ownership increasingly moves onto distributed ledger infrastructure, it remains unclear how existing securities laws, custody requirements, transfer agent functions and investor protection rules will apply.
Operational complexity: supporting traditional and tokenised fund structures simultaneously presents significant difficulties.
Pressure from parallel systems: tokenised ETFs are expected to coexist with traditional ETF structures over the coming years rather than replace them entirely, forcing issuers to operate parallel systems while regulation develops gradually.
Ross Lancaster, Head of Research at Acuiti, commented on the report’s conclusions:
“Tokenisation is a development that could reshape the industry over the long term. There is broad optimism across our expert network about its potential, but the path to adoption runs through regulatory clarity and the operational complexity of running traditional and tokenised structures simultaneously. The companies that ultimately succeed will be those that treat these structural changes as a strategic priority rather than a distant possibility.”
Tokenisation Could Reshape Market Infrastructure
The report also emphasised that the impact of tokenisation is expected to extend far beyond ETFs themselves. When asked which financial intermediaries would be most affected, respondents most frequently identified traditional custodians. This reflects one of the principal advantages of tokenisation: digital securities can automate ownership records, settlement and transfers directly through blockchain infrastructure, potentially reducing the number of intermediaries involved in post-trade processing. However, many industry participants expect the role of custodians to evolve rather than disappear entirely, gradually shifting towards digital asset custody, token administration and institutional blockchain infrastructure development. ETF executives increasingly regard tokenisation as a structural evolution of the market rather than simply another product innovation.
Tokenised ETF Adoption Timeline and Divisions Over Market Structure
Despite the current regulatory challenges, industry confidence in long-term adoption remains high, with most executives expecting the technology to achieve meaningful adoption before the end of this decade. The relevant expectations and areas of disagreement are outlined below:
| Survey Measure | Result | Time Frame | Category |
|---|---|---|---|
| ETF executives optimistic about the business outlook | Nearly 80% | Next three months | Industry sentiment |
| Tokenised ETFs expected to represent more than 10% of ETF assets or trading volume | Nearly half of respondents | Within three to five years | Adoption expectations |
| Intermediary expected to be most affected | Traditional custodians | Long term | Structural impact |
| Largest obstacle to private credit ETFs | Nearly 90% identified liquidity mismatch | Current | Product constraint |
Notably, the industry remains divided over the market’s eventual structure. Some respondents believe tokenised ETFs will exist as entirely separate products, while others expect tokenised share classes to coexist with traditional ETF shares. Many also anticipate that regulatory differences between jurisdictions will prevent the emergence of a single global model.
ETF Innovation Extends Far Beyond Tokenisation
Although tokenisation dominates industry discussions, the survey indicates that innovation continues across several areas of the ETF market. More than half of respondents believe that almost any investment can be incorporated into an ETF if it is structured appropriately, suggesting that ETF products are continuing to move beyond traditional passive equity strategies into increasingly complex investment products. Respondents also expressed strong support for new structures such as auto-callable ETFs in Europe. Meanwhile, 71% believed that the US Securities and Exchange Commission’s (SEC) approval of combined ETF and mutual fund share-class structures would mainly benefit large active asset managers. Private credit remains one of the most difficult areas for the industry to address, with nearly 90% of respondents identifying the mismatch between the daily liquidity required by ETFs and the illiquid nature of private credit assets as the greatest obstacle to wider adoption of private credit ETFs.
Industry Confidence Remains Strong
Despite geopolitical uncertainty and a changing regulatory environment, overall sentiment across the ETF industry remains optimistic. Nearly 80% of respondents expressed confidence in the business outlook for the next three months, reflecting continued investor inflows, expanding product innovation and sustained institutional demand for ETF investment solutions. Respondents also expect the pace of industry consolidation to accelerate, with ETF issuers viewed as the market participants most likely to undergo mergers and acquisitions as intensifying competition makes economies of scale increasingly important. Overall, the next phase of ETF innovation is likely to depend more on new market infrastructure than on new investment strategies. Industry executives broadly believe that regulation, rather than technology, will determine when this future arrives.
Questions About ETF Tokenisation and the Industry Outlook
When does the ETF industry expect tokenisation to become mainstream?
According to Acuiti’sETF Management Insight Report: Q3 2026, senior executives expect tokenised ETFs to become a significant part of the market within the next three to five years. Nearly half of respondents expect tokenised ETFs to account for more than 10% of ETF assets or trading volume within that period.
What is the main obstacle preventing the adoption of tokenised ETFs?
Respondents broadly identified regulation rather than technology as the main obstacle. Their principal concerns include legal uncertainty, operational complexity and the difficulty of operating traditional and tokenised fund structures in parallel while regulation develops gradually. The industry generally believes that the technology required for fund tokenisation is already largely mature.
What does tokenisation mean for traditional custodians?
Respondents expect traditional custodians to be the intermediaries most affected because digital securities can automate ownership records, settlement and transfers on blockchain infrastructure, potentially reducing the number of post-trade intermediaries. However, most expect custodians to evolve rather than disappear, moving into digital asset custody, token administration and institutional blockchain infrastructure development.
Why are private credit ETFs difficult to expand?
Nearly 90% of respondents identified the mismatch between the daily liquidity required by ETFs and the illiquid nature of private credit assets as the greatest obstacle preventing wider adoption of private credit ETFs.
What other areas of ETF innovation are developing besides tokenisation?
The survey indicates that ETF products are moving beyond traditional passive equity strategies, with more than half of respondents believing that almost any investment can be included in an ETF if structured appropriately. Respondents also supported new structures such as auto-callable ETFs in Europe, while the industry expects consolidation and merger activity among issuers to accelerate.
