Cathie Wood plans to bring Ark Invest funds on-chain

Ark Invest CEO Cathie Wood is eager to bring some of her firm’s investment funds onto the blockchain, believing tokenization will revolutionize financial markets.

Speaking at the Digital Asset Summit in New York, Wood emphasized the transformative power of tokenization: “We feel like tokenization is going to be big,” she said. We’d very much like to be able to tokenize our Venture Fund (ARKVX) or our Digital Asset Revolution Fund.”

She added that regulatory changes are starting to allow for this type of innovation, and Ark Invest wants to be at the forefront of this movement.

Wood’s push for blockchain adoption aligns with Ark Invest’s broader strategy of backing disruptive innovations, including cryptocurrencies, artificial intelligence, and fintech. A longtime advocate of decentralization and alternative financial systems, she sees these technologies as fundamental to shaping the future economy.

Regulatory uncertainty stalls Tokenization, but Ark Invest remains optimistic

Even though Wood and her team are eager to enter the space, one big issue is that regulators have yet to clarify what security tokens will look like in the U.S.

These tokens are a new class of digital assets that combine core aspects of cryptocurrencies, equities, and traditional investment funds (stocks and real estate) all in one efficient, more streamlined experience.

Unlike traditional assets, security tokens have no transaction overhead and inefficiencies. However, financial firms remain uncertain about what can and cannot be tokenized without specific Securities and Exchange Commission guidelines.

This challenge is not isolated to Ark Invest. A scrolling ring of firms interested in tokenization has recently entered a holding pattern, waiting for regulators to deliver a clear set of guidelines about what a security token can or cannot do. Tokenization has the potential to unlock a multi-trillion-dollar market by 2030, as predicted by some analysts, adding new levels of efficiency, liquidity and accessibility to the investment world. However, companies risk compliance issues without proper legal structures if they speed up too quickly.

Nonetheless, Wood is generally upbeat. As financial regulators see how blockchain-based assets are classified and demand a distinction between securities and non-securities, she argues, they will modify their rules accordingly. Ark Invest may be ready to capitalize on this transition when the window opens.

Coinbase explores tokenization but confronts challenges

Ark Invest isn’t the only major player eyeing tokenization—its top holding, Coinbase, is also exploring ways to bridge real-world assets to the blockchain.

In March, Coinbase’s Chief Financial Officer, Alesia Haas, revealed at the Morgan Stanley Technology, Media, and Telecom Conference that the company is in discussions with the SEC about launching a security token. Coinbase could become one of the first firms to offer regulated digital financial products if successful.

However, this isn’t Coinbase’s first attempt. In 2020, the company sought to go public with a security token but abandoned the plan due to regulatory hurdles. More recently, Jesse Pollack, founder of Base—Coinbase’s Ethereum-based Layer 2 network—clarified that the company is still in the exploratory phase of tokenization.

Pollack stated on X (formerly Twitter) that Coinbase was exploring the regulatory requirements needed to bring assets like $COIN to Base in a safe, compliant, and forward-looking manner.

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