Key Takeaways
- • PwC outlines a five-layer operating model framework for launching tokenized funds, covering the fund, onchain infrastructure, core servicing, distribution, and risk/governance.
- • The primary structural choice is between a tokenized share class of an existing fund (reusing legal structure, servicing and track record) and a fully tokenized fund (full build cost, no inherited constraints).
- • Transfer agency model is a key decision: the authoritative register may remain off-chain with the onchain record reflecting it, or blockchain records may form part of the official shareholder register.
- • State Street's Digital Asset Study 2026 finds 46% of respondents cite lack of regulatory clarity and 44% cite safety and soundness of technology, including cybersecurity, as top barriers to adoption.
- • PwC argues tokenization should be integrated into existing board oversight rather than treated as a one-time technology approval, with clear accountability for hybrid onchain/off-chain reconciliation.
Summary
PwC has published a framework for the operating model behind tokenized funds, drawing on State Street's study of respondents who cite benefits ranging from operating cost reduction and revenue growth to faster settlement and new client acquisition. According to PwC, an issuer must consider custody, cash, servicing, distribution and the register, and how these functions interact. The firm identifies five decision layers, noting that choices vary by product, domicile and operating model.
At the fund layer, PwC identifies two dominant models in registered and private-fund markets: a tokenized share class or interest in an existing fund, and a fully tokenized fund or feeder vehicle. A share class can reuse an existing fund's legal structure, governance, servicing and track record, potentially reducing setup requirements, but it inherits the parent's constraints. A fully tokenized fund requires new contracts and seed capital and lacks operating history. Domicile sets the outer limits of the product, with tokenized fund activity emerging in the US, Europe and parts of Asia.
On the infrastructure layer, PwC notes that the market has not yet coalesced around preferred blockchains or providers, and consolidation is likely. It cites the recent SWIFT launch of a blockchain-based digital ledger that potentially enables 24/7 cross-border payment and settlement. For servicing, PwC states that tokenized funds still require custody, administration, accounting, NAV operations, transfer agency and subscription and redemption processing. The transfer agency model is a central decision, as the register may be maintained off-chain or blockchain records may form part of the official shareholder register.
On distribution, PwC says the layer covers KYC and AML, investor onboarding, tax documentation and reporting, and that collateral mobility or secondary-market access may require the layer to do more than support onboarding. In its risk and governance layer, PwC cites State Street's Digital Asset Study 2026, in which 46% of respondents cite lack of regulatory clarity and 44% cite safety and soundness of the technology, including cybersecurity, as top barriers. PwC argues that fund boards should ask whether management can explain why tokenization is pursued, who is accountable for new functions, and what the contingency playbook requires. The firm concludes that hybrid onchain/off-chain operations will persist, creating reconciliation and control requirements, and that existing rules, valuation practices and market cutoffs continue to apply.
At the fund layer, PwC identifies two dominant models in registered and private-fund markets: a tokenized share class or interest in an existing fund, and a fully tokenized fund or feeder vehicle. A share class can reuse an existing fund's legal structure, governance, servicing and track record, potentially reducing setup requirements, but it inherits the parent's constraints. A fully tokenized fund requires new contracts and seed capital and lacks operating history. Domicile sets the outer limits of the product, with tokenized fund activity emerging in the US, Europe and parts of Asia.
On the infrastructure layer, PwC notes that the market has not yet coalesced around preferred blockchains or providers, and consolidation is likely. It cites the recent SWIFT launch of a blockchain-based digital ledger that potentially enables 24/7 cross-border payment and settlement. For servicing, PwC states that tokenized funds still require custody, administration, accounting, NAV operations, transfer agency and subscription and redemption processing. The transfer agency model is a central decision, as the register may be maintained off-chain or blockchain records may form part of the official shareholder register.
On distribution, PwC says the layer covers KYC and AML, investor onboarding, tax documentation and reporting, and that collateral mobility or secondary-market access may require the layer to do more than support onboarding. In its risk and governance layer, PwC cites State Street's Digital Asset Study 2026, in which 46% of respondents cite lack of regulatory clarity and 44% cite safety and soundness of the technology, including cybersecurity, as top barriers. PwC argues that fund boards should ask whether management can explain why tokenization is pursued, who is accountable for new functions, and what the contingency playbook requires. The firm concludes that hybrid onchain/off-chain operations will persist, creating reconciliation and control requirements, and that existing rules, valuation practices and market cutoffs continue to apply.
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