Wall Street's largest asset managers and banks have moved past simply holding digital assets and are now building issuance, trading, and settlement infrastructure directly on Ethereum (ETH), according to a report published by COINOTAG on October 10, 2026.

The network currently carries approximately $49.1 billion in decentralized finance (DeFi) value, per the report — a scale that has positioned Ethereum as the primary venue for institutional tokenization work. That figure reflects the value already deployed across Ethereum's on-chain lending, trading, and collateral protocols — the same infrastructure layer that tokenized institutional instruments plug into.

Among the most prominent examples, BlackRock issues tokenized funds on the network. The world's largest asset manager launched its BlackRock USD Institutional Digital Liquidity Fund (BUIDL), a tokenized money-market fund, on Ethereum in March 2024 — a move widely cited as a milestone for institutional real-world asset (RWA) tokenization, the practice of representing traditional instruments such as fund shares as blockchain tokens.

JPMorgan circulates its deposit token on a Layer 2 network built on top of Ethereum, the report notes. Deposit tokens are tokenized representations of commercial-bank deposits, letting bank money move across blockchain rails while remaining a claim on the issuing bank. Layer 2 networks — including Arbitrum, Optimism, and Base — inherit Ethereum's security while offering lower transaction costs, and have become a standard architecture for scaling payment and settlement applications to institutional grade.

Ethereum, launched in 2015, remains the largest smart-contract platform in the industry. Smart contracts — self-executing code that enforces the terms of a transaction — are what make instruments like tokenized funds and deposit tokens programmable at settlement. Stablecoins such as Circle's USDC are natively issued on the network, and DeFi protocols spanning lending markets, decentralized exchanges, and tokenized-collateral infrastructure hold the sector's deepest liquidity pools — depth that shapes how easily large trades can be executed in on-chain markets.

The activity described in the report reflects a broader shift among traditional financial institutions — from exploratory digital-asset custody toward production-grade tokenization, in which fund shares, deposit tokens, and other instruments are issued as on-chain tokens that can be transferred and settled around the clock, in contrast to the fixed trading hours and end-of-day processing of conventional market infrastructure.

With major asset managers issuing funds on the base layer and major banks running deposit tokens on Layer 2s built above it, Ethereum continues to anchor the construction of Wall Street's on-chain market infrastructure. How new institutional instruments split between the base layer and Layer 2s is a structural detail worth watching as that build-out continues.

This content was first published on COINOTAG.