Ophelia Snyder: Tokenization’s Biggest Hurdle Is Scaling for Traditional Finance

Former 21Shares co-founder Ophelia Snyder believes the conversation around tokenization is often missing the most important challenges facing traditional financial institutions. Speaking with CoinDesk’s Jennifer Sanasie on Public Keys, Snyder argued that while blockchain technology has made significant progress in improving transaction efficiency, the integration of tokenized assets into existing financial infrastructure remains a major obstacle.

According to Snyder, tokenization offers practical benefits by modernizing settlement rails and enabling more efficient movement of assets. However, the real challenge lies in connecting blockchain-based systems with the operational frameworks already used by banks, brokerages, and asset managers. Many discussions about tokenization focus heavily on trading activity while overlooking the complex processes that take place after a transaction is executed and before it is fully settled.

Snyder noted that key questions remain unanswered regarding how tokenized assets will fit into books and records systems, compliance procedures, and regulatory reporting requirements. Financial institutions must also reconsider risk management strategies, especially in a market where blockchain-based assets can trade 24 hours a day, seven days a week. In addition, many firms depend on third-party software providers whose platforms are not yet designed to support blockchain-native transactions.

She emphasized that the industry’s most pressing issue is not whether tokenization works, but whether it can scale effectively. While pilot programs and smaller projects may demonstrate success, supporting the volume and complexity of major capital markets presents a different challenge. Snyder pointed out that even a billion-dollar tokenization project represents only a small fraction of traditional financial market activity.

Managing large volumes of digital bearer assets on behalf of clients requires stronger oversight, governance, and operational controls than those used in conventional book-entry systems. To address these concerns, Snyder sees two possible paths forward: financial institutions can build entirely new software tailored to blockchain integration, or existing technology providers can adapt their platforms to accommodate tokenized assets.

Both options will require significant time and investment, particularly as many institutions continue their cloud migration initiatives. Looking ahead, Snyder expects the next stage of tokenization adoption to test whether blockchain infrastructure can function within the critical operations of major financial firms. If adoption momentum continues, she believes meaningful implementation efforts will accelerate over the coming years.