Despite volatility and uncertainties, financial markets continue to innovate and adapt.
According to a report by S&P Global, tokenization, artificial intelligence (AI) agents, and exchange-traded funds (ETFs) are among the most significant trends shaping the industry, noting their potential to broaden participation in financial markets, lower barriers to entry, and create more efficient, liquid, and interconnected systems.
Tokenization is poised to make financial transactions faster, cheaper, and more transparent, while AI agents have the potential to enhance efficiency by automating decision-making. ETFs, meanwhile, are democratizing access to complex or novel assets, turning them into familiar, easily tradable instruments.
Tokenization streamlines transactions
The report identifies tokenization as a transformative technology capable of unlocking new efficiencies. By representing assets on a blockchain, tokenization allows payments and transfers to occur on the same ledger at the same time, shortening settlement time, reducing counterparty risks, and increasing back-office efficiency.
S&P Global expects tokenization to develop in three phases. The first phase, from 2025 to 2028, will see tokenization first scale in the collateral operations of financial markets, where assets will be swapped for a cash payment instantly, bringing tangible commercial benefits to financial institutions involved with repo transactions and intraday liquidity management.
Wider acceptance of tokenization, however, will depend on the acceptance of on-chain cash leg solutions, including central bank digital currencies (CBDCs), regulated stablecoins and tokenized deposits. These solutions will be critical for adoption, since relying on traditional payment rails undermines the benefits of tokenization.
As these solutions mature, S&P Global expects digital bonds to be issued increasingly with on-chain delivery versus payment, allowing investors and issuers to capture efficiency gains. Overtime, CBDCs and stablecoins will eventually become ubiquitous in cross-border payments and corporate treasuries, reducing friction, cost and delay in existing systems.
In the second phase, between 2027 and 2033, tokenization is expected to expand across the credit spectrum, moving from niche financial operations into broader applications such as private credit markets, cross-border payments, and securitizations.
In this phase, tokenization will connect borrowers and lenders more efficiently, enabling innovations like investors using tokenized fund shares as collateral on decentralized lending platforms and the creation of fully on-chain collateralized loan obligations (CLOs) with real-time transparency.
Finally, in the third phase, from 2031 and 2035, tokenization will converge with AI, enabling autonomous AI agents to participate in markets by transacting with one another. This could revolutionize asset management and capital markets by increasing access to alternative investments, simplifying downstream processes, and automating asset and value transfer between multiple parties.
Furthermore, the use of AI in portfolio construction can help asset managers better tailor portfolios for investors according to risk tolerances, investment objectives, and liquidity needs.
The market for tokenized real-world assets has grown significantly over the past years and is projected to accelerate even further over the next decade. Between 2025 and 2033, the market is expected to achieve a compound annual growth rate (CAGR) of 53%, soaring from US$600 billion to US$18.9 trillion, according to a new report by digital asset infrastructure provider Ripple, and Boston Consulting Group (BCG).
AI agents improve operational efficiencies
AI agents, which refer to intelligent digital systems that are capable of making decisions and taking actions with minimal human intervention, have the potential to transform financial markets by enabling efficient, intelligent decision-making for market participants.
These systems can process vast amounts of data quickly, increasing operational efficiency, and reducing errors. Agentic AI solutions can also improve price discovery by adjusting prices in real time based on supply and demand changes, and generate timely predictions, thereby optimizing pricing strategies, and expanding revenue opportunities.
Agentic AI already exists today, but is primarily active in crypto markets through trading bots. According to the report, most of this activity has concentrated in smaller altcoin or meme-coin markets, with trading bots representing an average of 5% of daily trading volumes on decentralized exchanges on the Solana blockchain in 2025 so far.
ETFs improve access to new assets
Another key trend highlighted by S&P Global is ETFs. ETFs are well-known investment vehicles that trade on traditional exchanges and which offer a point of entry to new assets. These vehicles can own financial assets such as stocks, bonds, currencies, and/or commodities, a flexible structure which allows them to adapt to new trends and investment themes.
This adaptability is evident in the rise of crypto ETFs. In January 2024, US Securities and Exchange Commission (SEC) approved 11 spot bitcoin ETFs. These instruments generated a trading volume of US$4.7 billion on day one, reflecting their appeal and convenience.
Investor demand for crypto ETFs has surged this year amid a sharp rise in the price of cryptocurrencies. Bitcoin ETFs saw two consecutive days of over US$1 billion in inflows on July 10 and 11 as the cryptocurrency continued to hit new heights, reaching a record of US$120,000 on July 23, 2025.
Beyond cryptocurrencies, ETFs of CLOs have also grown rapidly. These instruments, which were first launched in 2020, have doubled or even tripled in value quarter-over-quarter since 2023, reaching US$30 billion in assets under management (AUM) as of the first quarter of 2025.
Featured image by davidpinta9122 on Freepik
