Tokenisation has long been viewed as a transformative force in financial markets, but its development has been gradual and often fragmented. Today, this is beginning to shift. Across capital markets, funds and collateral management, early implementations are moving beyond experimentation, with tangible gains in efficiency, settlement and asset mobility starting to emerge.
At its core, tokenisation is not a single model but a spectrum of approaches, ranging from fully native digital securities to indirect or synthetic structures that replicate exposure to underlying assets. This diversity reflects both the flexibility of the technology and the complexity of embedding financial assets within existing legal and regulatory frameworks. As a result, understanding the legal nature of tokenised assets, and the rights they confer, remains central to their adoption.
Momentum is building, particularly in areas such as collateral management and fund distribution, where tokenisation is already delivering practical benefits. Yet adoption remains uneven. Regulatory treatment of blockchain infrastructure, the absence of widely accepted on-chain cash settlement solutions, and fragmentation across competing protocols continue to constrain scale. In many cases, the limiting factors are not technological, but institutional and policy-driven.
Looking ahead, the report highlights that tokenisation has the potential to reshape how financial markets operate. Lower issuance costs, fractional ownership and broader investor access could open new sources of capital and improve market efficiency. However, realising this potential will depend on greater alignment between regulation, market infrastructure and industry adoption – moving tokenisation from isolated use cases to a more integrated financial ecosystem.
Key highlights
Some of the report’s key highlights include:
- The benefits of tokenisation include enhanced reach, reduced risk, greater efficiency and faster settlement, depending on the asset class.
- The tokenisation presently taking place in financial markets typically falls into one of three categories: direct, indirect and incomplete tokenisation. These categories relate to the links between the token and the underlying asset and potential investors must carefully consider the implications of the legal framework in which a token exists.
- Several public-sector borrowers have experimented with issuing tokenised bonds, including Slovenia, Hong Kong, Luxembourg, the World Bank, several Swiss cantons and the European Investment Bank.
- There are many different blockchain protocols currently in operation, and more are being added since businesses are keen to develop their own blockchains as a means of differentiating their commercial offerings.
- Early experiments with blockchain bonds have revealed that, unless the market agrees on a medium for settling cash, the benefits of tokenising bonds are unlikely to be fully realised.
- One of the most promising use cases for tokenisation in capital markets is the tokenisation of collateral – assets can remain with the custodian, but the blockchain maintained record of ownership can be updated quickly and easily.
- In some cases, the obstacle to wider adoption of tokenisation is policy, rather than technical considerations. Tokenisation might be a catalyst for policy change.
- In 2024, 16% of surveyed bond market participants said they would prefer T+0 settlement. The remaining 84% preferred a longer period – typically two days.
- Many market participants and policymakers hope that tokenisation will cut out intermediaries, but the incumbents do not intend to quietly watch their functions eroded and are developing their own tokenisation solutions.