J.P. Morgan is testing tokenized ETFs on Kinexys as the global ETF market may grow from $19.5T in 2025 to $35T by 2030.
J.P. Morgan is expanding its focus on tokenized ETFs as the global ETF market grows fast.
The bank says tokenization may change ETFs and the wider funds industry.
Exchange-traded funds have moved far from their early market structure in 1993. Today, technology drives pricing, trading, reporting, and fund operations.
J.P. Morgan Sees Tokenization Entering ETF Markets
J.P. Morgan said tokenization could support 24/7 market access and near-instant settlement. It may also lower costs and reduce the role of intermediaries.
The bank is testing tokenized ETFs through its Kinexys platform. These tests remain at the proof-of-concept stage, according to J.P. Morgan.
Ciarán Fitzpatrick, global head of ETF Product at J.P. Morgan Securities Services, explained the bank’s view.
“We believe tokenization will certainly drive how the market changes, not just for ETFs but across the funds industry as a whole.”
Tokenized ETFs can take two main forms. Synthetic tokenized ETFs track a real ETF through a derivative contract, while native tokenized ETFs issue shares on-chain.
ETF Growth Pushes More Automated Trading
The global ETF market could reach $35 trillion by 2030, according to a PwC survey cited by J.P. Morgan. That would mark growth from $19.5 trillion in 2025.
This growth has increased the need for faster and cheaper trading systems. Automated tools can process large volumes with fewer manual steps.
Matthew Legg, global head of Delta One and ETF Sales at J.P. Morgan, said ETF orders have grown over time. He said this growth supports more electronic trading across the market.
Authorized participants now use order management systems to manage ETF activity. These systems often connect with trading venues through APIs, which helps speed up workflows.
Fitzpatrick said J.P. Morgan now receives about half of its primary market flow through APIs. He added that API integration continues to move faster across ETF operations.
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Active ETFs Raise Technology Demands
Active ETFs are also changing the technology needs of the ETF market. J.P. Morgan Asset Management said active ETFs made up 83% of new ETF launches in 2025.
Active ETFs change holdings more often than passive products. They may also hold assets that are harder to price or source.
Because of this, ETF providers need stronger data tools and tighter controls. They also need faster reporting for market makers and trading partners.
J.P. Morgan is using its Athena platform to improve ETF reporting. Fitzpatrick said live feeds from Athena help produce more detailed reports for market makers.
Legg said new active ETF products will keep raising technology needs.
“As new products come out in the active ETFs space, including new underlying assets, new tech capabilities need to be developed.”
The bank said tokenization may become part of this wider technology shift. However, Fitzpatrick said stronger use cases may still be a few years away.
Source: https://www.livebitcoinnews.com/j-p-morgan-bets-on-tokenized-etfs-as-market-heads-toward-35t-by-2030/
