On July 22, 2026, Franklin Templeton's Chetan Karkhanis told Bitcoin.com News that regulation, interoperability, and distribution now block tokenized real-world assets from scaling, more than any gap in the underlying technology.
Karkhanis leads digital asset partnerships across Asia-Pacific at Franklin Templeton, an asset manager overseeing $1.78 trillion as of May 31, 2026. His comments came in an exclusive interview focused on where blockchain-based investment products stand today.
Tokenized funds, securities, and cash instruments have moved past proof-of-concept. What remains unsolved is the lack of shared technical rails connecting them.
'From a technology standpoint, the biggest challenge is probably ubiquity of standards with the product set,' Karkhanis said. Assets and payments routinely operate on separate networks. Settlement may rely on stablecoins, tokenized bank deposits, or CBDCs, each governed by different systems. 'Even simple tokenized cash products lack common rails of convergence,' he added.
The Bank for International Settlements has outlined how interoperable networks linking tokenized assets with central bank reserves and commercial bank money could cut reconciliation time, support simultaneous settlement, and enable programmable transactions. Without shared infrastructure, those gains stay confined to individual platforms.
Karkhanis put the regulatory problem plainly: 'The larger challenges are likely regulatory clarity across borders and really awareness, adoption and education, which could lead to greater adoption of tokenized RWA if done right.' Cross-border rule inconsistency determines where products can be sold, who can hold them, and how custody is treated.
A November 2025 report from the International Organization of Securities Commissions identified the same cluster of barriers: regulatory treatment, interoperability, settlement arrangements, and operational dependencies. IOSCO noted that greater coordination could expand capital pools, while continued fragmentation keeps participation narrow. Blockchain's push into institutional finance is gaining ground elsewhere, but the tokenized RWA segment faces a more complex regulatory maze.
On distribution, Karkhanis acknowledged that traditional institutions hold a structural edge through existing client networks. Digital platforms, though, could reach investor segments that conventional channels never served, bringing in fresh capital rather than just migrating existing assets.
He argued that issuance volumes are a weak measure of progress. Investor participation rates, on-chain liquidity depth, and actual portfolio allocation tell a more accurate story about whether tokenized assets are being used or simply issued.
Stablecoins sit at the intersection of several issues Karkhanis raised, since they function as settlement instruments across many tokenized asset platforms. Circle's recent stablecoin payments pilot in South Korea illustrates how settlement infrastructure is being tested in live market conditions across the Asia-Pacific region Karkhanis oversees.
Franklin Templeton trades on the NYSE under the ticker BEN and has been among the larger traditional asset managers actively building blockchain-based investment products.
This article is for informational purposes only and does not constitute financial or investment advice.
