Wall Street’s most active laboratory transforms private assets with wrappers and repacks

Wall Street has discovered a new favorite hobby: taking illiquid private assets and dressing them up in blockchain-friendly packaging.

According to Pantera Capital’s Q1 2026 State of Tokenization report, the tokenized assets market has reached approximately $320.6 billion in value.

The wrapper problem

Of all tracked tokenized assets, 77.6% are classified as “wrappers”—digital receipts representing assets that still live off-chain. Only 2.7% of tokenized assets qualify as truly native on-chain instruments, where the asset itself, its custody, its cash flows, and its entire lifecycle exist natively on a blockchain. The remaining 11.1% fall into a hybrid category, blending on-chain and off-chain elements in various configurations.

So when Wall Street says it’s “tokenizing” private credit, real estate, or equity, what it mostly means right now is creating a blockchain-based tracking layer on top of traditional financial plumbing.

Who’s building what

BlackRock’s BUIDL tokenized Treasury fund has become one of the most visible institutional efforts, letting investors access US Treasury exposure through a blockchain-native vehicle.

JPMorgan is exploring blockchain-based tokenized private equity and money market shares through its Onyx division.

Victory Park Capital launched a $1.7 billion tokenized fund on zkSync, representing one of the larger deployments of tokenized assets on a Layer 2 network in the private credit sector.

Figure Network has been carving out a niche in on-chain home equity loans, pushing into the 2.7% native on-chain category where the blockchain functions as the actual operating system for the asset.

Why the gap between vision and reality persists

Most jurisdictions still require traditional custodians, transfer agents, and intermediaries for securities. Until regulators in the US and other major markets provide clearer frameworks for native on-chain securities, the wrapper model will remain the path of least resistance.

For assets like private credit or real estate, the underlying income streams—interest payments, rental income, loan repayments—are generated in the traditional financial system. Moving those cash flows fully on-chain requires integration with banking systems, payment processors, and tax infrastructure that wasn’t designed for blockchain interaction.

What this means for investors

For traditional investors, the fractional ownership angle is the real draw. Private credit funds that previously required $1 million minimums can be sliced into much smaller units via tokenization, opening up asset classes historically reserved for endowments and family offices to a broader investor base.

The risk to watch is the gap between marketing and mechanics. A tokenized fund that still relies entirely on off-chain custody, off-chain legal enforcement, and off-chain cash flows doesn’t actually deliver the counterparty risk reduction or transparency benefits that blockchain was supposed to provide.