Tokenization has become one of the hottest narratives in crypto, promising efficiency, liquidity, and accessibility. But according to Morgan Krupetsky, Ava Labs’ Senior Director for Business Development, the concept itself isn’t new and the key now is distinguishing between hype and what’s actually being used in the real world.
Tokenization: Separating Hype from Reality
“People have been experimenting with tokenization since 2017,” Krupetsky told crypto.news. “We’ve seen everything from uranium to skyscrapers announced as tokenized assets. But most of those are just announcements of announcements not live products.”
The clear success story, she said, is stablecoins, which represent the largest proven example of tokenization, with more than $280 billion in market cap today. Stablecoins have also sparked interest in related products like tokenized money market funds, a smaller but steadily growing segment.
Other experiments are underway in tokenized credit, equities, collectibles, and commodities. But Krupetsky stressed that the key is to focus on what’s live and functional on-chain not just marketing.
Where the Real Opportunity Lies
Among the emerging areas, Krupetsky sees the private credit market as especially promising.
“These products are yield-bearing, and when you automate things like interest payments or waterfall distributions with stablecoins, the benefits of tokenization become very tangible,” she explained.
Asset-backed finance (ABF), in particular, stands to benefit from programmable facilities that can reduce costs and streamline processes. By using stablecoins and blockchain infrastructure, smaller funds and family offices could enter a lending space that’s currently dominated by the largest alternative asset managers.
“This isn’t just about creating liquidity by tokenizing loans for secondary trading,” she said. “The real impact is in upgrading the process itself.”
Tech as an Enabler, Not a Replacement
Asked whether tokenization could replace human decision-making in lending, Krupetsky was clear: “The goal isn’t to replace human judgment. It’s to give institutions and individuals better tools.”
Like AI, blockchain is best used as an enabler, helping decisions be made faster and with fresher data. But she cautioned: simply tokenizing an asset doesn’t automatically create demand or liquidity. The technology provides the tools for markets but demand still has to exist.
Risks and Regulation
Tokenization also doesn’t guarantee compliance or transparency, Krupetsky added. Blockchain can reflect laws and help manage compliance more effectively, but it doesn’t replace the role of regulators or responsible issuers.
“The technology helps, but it doesn’t replace the responsibility of humans to ensure compliance,” she said.
In the U.S., she noted, the regulatory climate has shifted positively since the last election, providing strong tailwinds for the industry. Institutions and asset managers are now more open to exploring public blockchains, and more issuance is expected to happen natively on-chain over time.
DeFi Meets Traditional Finance
Krupetsky believes the future lies in the convergence of DeFi, CeFi, and tokenization. DeFi protocols may not attract big institutions directly, but their infrastructure can power the back end of fintech apps, neobanks, and even traditional platforms.
For end users, the blockchain layer should eventually be invisible. “Imagine being able to spend directly from a tokenized money market fund with a debit card,” she said. “That’s the kind of user experience that will drive adoption.”
Avalanche’s Role in Tokenization
Ava Labs has been active in tokenization long before it became a buzzword. In 2021, Avalanche partnered with Securitize and KKR to tokenize part of their healthcare growth fund, showing early proof of concept.
Since then, the focus has been on bringing high-quality assets from managers like Apollo, BlackRock, and Wellington on-chain, while also building out distribution channels so those assets can reach investors through familiar platforms.
“The reality is that most liquidity is still off-chain,” Krupetsky said. “The path forward is connecting that liquidity with tokenized assets using the systems investors already use.”
The Bigger Vision
For Krupetsky, true mass adoption will happen when blockchain becomes invisible just like the internet did.
“Back then, people talked about ‘internet companies.’ Today every company uses the internet. We’ll reach the same milestone when blockchain is just part of how the world operates. At that point, there won’t be such a thing as a ‘blockchain company’ it will just be the infrastructure powering finance, business, and government.”
