Franklin Templeton's Chetan Karkhanis says tokenized asset adoption is limited by inconsistent standards, unclear cross-border rules, and distribution platforms still at proof-of-concept stage.
Franklin Templeton’s Asia-Pacific digital asset lead, Chetan Karkhanis, laid out why tokenized real-world assets have not scaled despite years of development. In an interview with Bitcoin.com News, he pointed to inconsistent technology standards, unclear cross-border rules, and distribution platforms that remain at proof-of-concept stage.
“From a technology standpoint, the biggest challenge is probably ubiquity of standards with the product set,” Karkhanis said.
Assets and payments often run on separate networks. Settlement may involve stablecoins, tokenized bank deposits, or central bank digital currencies that each follow different rules. Karkhanis noted that even simple tokenized cash products lack common rails of convergence.
The Bank for International Settlements has described how interoperable networks connecting tokenized assets with central bank reserves and commercial bank money could reduce reconciliation and enable simultaneous settlement. Without common infrastructure, those benefits stay confined to individual platforms.
Karkhanis also flagged regulatory fragmentation. “The larger challenges are likely regulatory clarity across borders and really awareness, adoption and education,” he said. The International Organization of Securities Commissions, in a November 2025 report, likewise identified regulatory treatment, interoperability, and settlement arrangements as persistent barriers.
Distribution is the third hurdle. “Traditional distribution platforms are not all there yet. Some are experimenting and launching POCs but not at scale commercial deployments,” Karkhanis said. He added that liquidity in tokenized RWA and issuance remains minuscule compared with traditional assets.
Franklin Templeton (NYSE: BEN), which reported $1.78 trillion in assets under management as of May 31, 2026, is among the large asset managers building blockchain-based products. The stock carries an Unscored Alpha label on AlphaScala. Its Onchain U.S. Government Money Fund combines a regulated money market fund with blockchain record-keeping.
Rather than displacing existing finance, tokenization may extend it through traditional accounts, exchanges, wallets, and blockchain applications. Karkhanis said both incumbents and DeFi players will have opportunities to participate. Competition, he argued, will depend on accessibility, product selection, regulated custody, and settlement efficiency, not just infrastructure.
Familiar products like tokenized stocks, bonds, and ETFs may offer the clearest route to broader distribution because investors already understand their risks and returns. Tokenization could deliver its greatest value in markets with complex ownership, restricted access, or frequent collateral movement.
Karkhanis said the main role asset managers can play at this juncture is education and awareness building. Mainstream investors will evaluate returns, risks, costs, and liquidity, not the technology recording ownership.
In five years, he expects blockchain infrastructure to fade into the background, with investors benefiting from tokenized products without needing to understand the underlying technology. “Simplifying that experience and making it seamless will ensure greater adoption and success will really be measured by the level of asset growth and investor adoption,” Karkhanis said.
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