Why Is NYLIM Looking Beyond Faster Settlement?
Tokenization is often framed around faster settlement, 24/7 trading, and the use of traditional assets in decentralized finance. New York Life Investment Management sees a larger opportunity: using blockchain infrastructure to change how investment portfolios are built.
Thomas Sy, head of multi-asset solutions at NYLIM, said the future of asset management is moving toward greater customization. His team oversees about $11 billion within New York Life’s $807 billion asset management arm, giving the view weight beyond a narrow crypto experiment.
“We believe that the future of asset management is going to be customization,” Sy said. “The only technology that can help us get there at scale is the blockchain.”
The argument shifts tokenization away from a simple efficiency story. For large asset managers, the more important question may be whether blockchain can support portfolios tailored to individual investors without adding the operational burden that currently makes mass customization difficult.
How Could Blockchain Change Portfolio Design?
Customized portfolios often combine ETFs, bonds, private credit, and other instruments. In the current system, each asset class can involve different platforms, settlement cycles, custodians, transfer agents, and reporting structures. That fragmentation makes personalization expensive and hard to scale.
Sy said the goal is to move customization into the assets themselves rather than build complex operational layers around them. “The end goal is to embed the customization within the asset itself, rather than the customization sitting around the operations around the different assets,” he said.
That is the core institutional case for tokenization. If fund shares, bonds, private credit exposures, and cash instruments can move across common blockchain rails, asset managers may be able to assemble portfolios with more granular exposures, cleaner recordkeeping, and lower friction between components.
Tokenization may also improve back-office processes such as transfer agency, settlement, and asset servicing. Those areas rarely receive the same attention as trading, but they shape cost, speed, and product design across the asset management industry.
“If you can bring that down by 10% or 20%, that’s a better outcome for our clients,” Sy said.
Investor Takeaway
NYLIM’s tokenization thesis is not mainly about crypto-native trading. It is about whether blockchain can reduce the operational cost of personalization and make customized portfolios viable for a wider investor base.
Why Do Stablecoins Matter For Tokenized Funds?
Stablecoins have become the first practical bridge bringing traditional financial institutions onchain. The market has grown to more than $300 billion, with adoption expanding in cross-border payments and treasury management.
Sy said stablecoins have helped institutions become more comfortable with blockchain-based financial activity. “Stablecoins were probably one of the biggest unlocks in the past 2 years,” he said. “Adopting stablecoins was the gateway to get them onchain.”
That gateway may create demand for tokenized investment products. As banks, payment firms, and fintech companies hold more stablecoin balances, they may seek institutional-grade tokenized assets where those balances can earn yield rather than remain idle in cash.
That dynamic helps explain why large financial firms are issuing tokenized money market funds, private credit products, and bond strategies. The opportunity is not only to move existing funds onto blockchain rails, but to meet demand from institutions already experimenting with digital cash.
NYLIM recently teamed up with Centrifuge to bring one of its high-yield corporate bond strategies onchain, placing the firm among asset management groups testing tokenization beyond short-term cash products.
What Still Needs To Mature Before DeFi Adoption?
NYLIM is also studying decentralized finance, but broader institutional use remains limited by market infrastructure. Sy said DeFi may have a role, but institutions need more mature systems before committing at scale.
“I do think there is a use case for DeFi, but we need a little bit more time for it to institutionalize,” he said.
The missing pieces include tokenized collateral, central clearing, prime brokerage services, stronger custody models, and compliance frameworks that can support regulated institutions. Without those layers, DeFi remains difficult for large asset managers to use in ordinary portfolio operations.
For investors, the near-term impact of tokenization is likely to appear first in operational efficiency and product access rather than fully open DeFi trading. Large managers are more likely to tokenize funds, bonds, and credit strategies within controlled environments before moving into more permissionless markets.
The long-term question is whether blockchain becomes a new distribution layer for existing products or a deeper redesign of portfolio construction. NYLIM’s view points to the second outcome. If customization can be embedded directly into tokenized assets, blockchain may become less about making markets trade longer hours and more about changing how investment products are built, serviced, and delivered.
