Contents 1

In collaboration with Accenture

Asset Tokenization
in Financial Markets: The Next
Generation of Value Exchange
INSIGHT REPORT
M AY 2 0 2 5
 Contents Contents 2

41
Contents 5. Impacts of tokenization

5.1 Evolving market structures 42

Disclaimer
This document is published by the World
5.2 Changes to incumbents 42 Economic Forum as a contribution to a
Foreword 3
project, insight area or interaction. The
Executive summary 4 5.3 New market roles 46
findings, interpretations and conclusions
Introduction 5 5.4 New products 46 expressed herein are a result of a collaborative
process facilitated and endorsed by the World
1. Foundational key concepts 6 6. Design choices 47
Economic Forum but whose results do not
1.1 Tokenization 7 6.1 Infrastructure 48 necessarily represent the views of the World
Economic Forum, nor the entirety of its
1.2 Programmable ledgers 8 6.2 Settlement assets 50
Members, Partners or other stakeholders.
1.3 Tokenization models 8 6.3 Operating hours 50
© 2025 World Economic Forum. All rights
1.4 Token attributes 11 7. Considerations 51 reserved. No part of this publication may be
7.1 Cybersecurity 52 reproduced or transmitted in any form or by
1.5 Settlement assets 12
any means, including photocopying and
2. Value proposition 13 7.2 Financial stability 53 recording, or by any information storage and
7.3 Regulatory developments 53 retrieval system.
3. Tokenized assets 18

3.1 Use case patterns 19 Conclusion 55

3.2 Asset issuance 22 Contributors 56 THIS REPORT IS INTERACTIVE

3.3 Securities financing 33 Endnotes 58

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3.4 Asset management 34 for pages that can be
4. Barriers to adoption 37 interacted with
4.1 Traditional financial infrastructure 38

4.2 Global standards 38

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4.3 Cross-chain interoperability 39 capability, please download
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4.5 Privacy and compliance 40
 Foreword Contents 3

Financial markets are evolving to meet independent networks. In contrast,

Foreword growing demands for speed, efficiency and
connectivity. Among the forces driving this
tokenization – enabled by programmable
ledgers and smart contracts – offers the
transformation is the rise of distributed potential for unified systems of record, flexible
ledger technology (DLT) and tokenization – custody models and on-chain governance.
innovations that have the ability to offer faster These capabilities unlock new possibilities
Duane Block
transactions, improved efficiency and greater for real-time settlement, fractional ownership,
Managing Director,
Accenture transparency across asset classes. With asset composability and more resilient
strong momentum towards regulatory market design.
clarity and increasing technological maturity,
In this context, the World Economic Forum
the tokenization of financial assets is well
has collaborated with Accenture to examine
positioned to support the next generation
the role of asset tokenization in financial
Drew Propson of value exchange in banking and
markets. The report that follows is the result
Head, Technology capital markets.
and Innovation of this joint effort. Over the past year, we
in Financial Services, Global stakeholders are now commonly analysed asset classes ranging from equities
World Economic Forum distinguishing between attention-grabbing to alternative investments to develop a
cryptocurrencies and the underlying taxonomy of tokenization models and the
technology, fuelling a renewed era of public– differentiation they provide. While tokenization
private cooperation focused on scaling is expected to scale, realizing its full impact will
tokenization in a safe and compliant manner. require sustained public–private coordination
Yet progress in financial infrastructure is and a phased, risk-aware approach. We hope
inherently gradual. History reflects this in the that the insights shared in this report serve
multi-decade transition from paper-based as a valuable foundation for informed decision-
certificates to electronic book entries following making and encourage continued
the 1960s Paperwork Crisis. While the collaboration across the financial ecosystem.
changes will not be immediate, financial
Finally, we extend our sincere gratitude to the
markets may be approaching another major
many experts who contributed to this analysis.
phase in the development of their architecture,
Their insights and perspectives, offered
powered this time by tokenization.
through interviews, workshops and written
Today’s global financial system relies on reviews, have been instrumental in shaping the
fragmented, message-based integrations to findings of this report.
reconcile ownership and transfers across
 Executive summary Contents 4

Executive The report examines existing use cases to clearly articulate tokenization’s unique value proposition and outlines five distinct
differentiators powered by programmable ledgers (DLT/blockchain):

summary
This report employed a global
multistakeholder approach Shared system Flexible custodial Programmability Asset fractionalization Composability
to exploring the potential of record arrangements Operational efficiency Expanded market Enhanced multi-asset
impacts of asset tokenization Unified records that Increased user- via smart contracts that accessibility through mobility, enabling
on financial markets. drive information centricity through automate complex micro-units of efficient reuse of
symmetry and provide varied custody models, financial transactions, ownership, significantly collateral across
an unambiguous view granting end users embedding logic reducing administrative trading and settlement
Tokenization presents a transformative
of asset ownership greater control over directly into processes burdens and activities
digital asset ownership model, fundamentally
their assets barriers to entry
reshaping global financial markets. When
effectively implemented, tokenization can
significantly enhance transparency,
accessibility, operational and cost efficiency This report assesses current asset tokenization these challenges through careful coordination infrastructure readiness, commercial viability,
and market flexibility, allowing participants use cases in issuance, securities financing and and pragmatic strategies is critical for regulatory fragmentation and insufficient, yet
to transact at any time and anywhere. The asset management, highlighting conditions tokenization to achieve scale and lasting emerging, market coordination. Transitioning
core advantage of tokenization lies in and regional factors that determine successful impact in financial markets. financial markets from fixed-trade windows
democratizing financial market access, implementation. Both incumbent and new and regional frameworks to continuous,
As tokenization develops, there are design
enabled by trusted infrastructure. market structures, along with digitally native global operations requires a practical,
choices that need to be considered such as
service providers, are actively reshaping their phased approach.
the choice between permissioned and
services to meet the growing expectations
permissionless ledgers, the most suitable Tokenization has the potential to unlock the
for speed, efficiency and user-centricity in
settlement asset and the operating hours of next generation of value exchange in financial
a rapidly evolving landscape.
future marketplaces. Likewise, there are markets. While barriers remain, momentum
While the potential of tokenization is clear, considerations for deploying tokenized continues to build, and financial institutions,
barriers to adoption remain, including legacy products, including cybersecurity, financial policy-makers and technology providers
infrastructure integration, inconsistent global stability and regulatory developments. need to coordinate regulation, interoperability
standards, limited cross-chain interoperability, and consumer protections to safely usher
Despite its benefits, tokenization adoption
inadequate secondary market liquidity, and in this evolution.
privacy and compliance concerns. Addressing remains non-linear, constrained by
 Introduction Contents 5

Introduction q
This report will This report will not
Research methods:
DESK RESEARCH
This report examines the — Focus on regulated financial market that analysed more than 75
activities and instruments industry reports to establish initial
evolution of asset tokenization assumptions
in financial markets by — Define tokenization’s key differentiating
analysing its distinguishing features and value proposition INTERVIEWS
features and value proposition. — Identify emerging use cases and promising with more than 60 experts
applications of tokenization representing public- and private-
Scope: In the context of recent advancements sector stakeholders
in tokenization in financial markets, the — Map the expected impacts on the financial
report evaluates tokenized asset classes markets value chain COMMUNITY WORKSHOPS
and key use cases, examines the barriers conducted worldwide, in London,
— Share strategies for overcoming identified
to adoption, identifies expected market Singapore and San Francisco
barriers to adoption
impacts and outlines strategies for realizing
scalable implementation. — Outline design choices and considerations
for adopting tokenization Community:
The report builds on previous World Economic
Forum reports, including Digital Assets, STEERING COMMITTEE
Distributed Ledger Technology and the Future
of 10 leaders from leading financial
of Capital Markets (2021), Evolution of Non-
institutions and technology
Fungible Tokens (2023) and Modernizing
companies to advise on strategic
Financial Markets with Wholesale Central Bank
direction
Digital Currency (2024).

These reports have covered the tokenization COMMUNITY

of payment assets and non-financial assets. of more than 200 expert
This report focuses on financial assets. members representing more than
100 institutions

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Foundational key concepts Contents 6

1 Foundational key concepts

Tokenization facilitates the exchange of information and value. Its
defining aspects are proof of value, ownership and transaction.
 Foundational key concepts Contents 7

FIGURE 1
1.1 Tokenization
The evolution of financial assets
Tokenization is the process of using a
programmable ledger to digitally represent the Pre-1980s 1980s–2010s Post-2010s
ownership of an asset – financial or otherwise
– in a transferable format. By creating provably
unique digital tokens that can be issued,
stored and traded on these ledgers,
tokenization enables the exchange of
information and value.

A “token”, in this context, represents PAPER CERTIFICATES DEMATERIALIZATION TOKENIZATION

something of value (e.g. a claim on or digitized — Securities were manually issued, — Electronic book-entry systems digitized — Tokenization introduces a shared
version of a real or financial asset) that can be transferred and settled through securities and centralized them within system of record and programmable,
legally and operationally exchanged on a physical paper certificates, creating clearing houses and custodians, real-time asset transfer, reducing
programmable ledger.1 significant operational bottlenecks, solving many operational inefficiencies settlement risk and optimizing
slow T+5+ settlements and fragmented from the paper era. intermediary chains.
record-keeping across registrars and
custodians. — However, they introduced new — With on-chain auditability and greater
dependencies on intermediaries, and ownership control, tokenized assets
— The lack of effective, centralized settlement cycles – although faster – address the coordination inefficiencies
coordination made reconciliation error- still hovered at T+2. and the latency and exclusivity of prior
prone and delayed capital movement. iterations of financial systems.
— Geographic barriers and limited
interoperability constrained inclusivity, — This shift enables multi-asset
and real-time transparency was operations underpinned by financial
available only to selected institutions. infrastructure that is more
composable and accessible.

FRAGMENTED AND CENTRALIZED AND DISTRIBUTED AND

MANUAL-INTENSIVE INTERMEDIARY-INTENSIVE USER-CENTRIC
 Foundational key concepts Contents 8

1.2 Programmable 1.3 Tokenization

ledgers models
Programmable ledgers or DLT and blockchain According to the World Economic Forum,
systems support smart contract-based tokenization is differentiated from conventional
processes. Programmable ledgers may be systems in the following ways:3
public or private and permissioned or
permissionless, each with varying trade-offs PROOF OF VALUE
and advantages. These systems allow Provides evidence or verification
financial assets to be tokenized by codifying that an asset has a certain value
essential data and properties of the asset on or uniqueness
the ledger or on-chain.2
PROOF OF OWNERSHIP
— “On-chain” refers to an asset or activity
being operated on a programmable ledger; Establishes unambiguous
this term is borrowed from the popularized ownership and assigns agency
“blockchain” term, which is a specific type of the asset to the rightful owner
of programmable ledger.
PROOF OF TRANSACTION
— “Off-chain” refers to financial processes or
Produces a verifiable record to
asset life-cycle functions taking place on
provide transaction history and
non-tokenized, or conventional, systems.
evidence of settlement

This report adopts these three viewpoints to

identify two tokenization models – backed and
native – and analyses their impacts across
issuance, value, ownership, transaction or
settlement, custody and redemption.4
Fundamentally, tokenization acts as a
capability to enhance settlement operations,
underpinned by the asset life cycle functions.
 Foundational key concepts Contents 9

FIGURE 2
Native token Backed token
Tokenization models
Native tokens represent assets issued on-
chain without reference to off-chain
MODEL CONVENTIONAL BACKED TOKEN NATIVE TOKEN
counterparts, except for compliance functions
or identity management, embedding issuance,
trading, custody, settlement and ownership To allow investors to trade, To allow investors to trade, hold and settle on-chain, To allow investors to trade,
Purpose
hold and settle off-chain with the ability to redeem the underlying reference asset hold and settle on-chain
within the token. From a lending and collateral
standpoint, this model resembles a “perfect
asset” as theoretically no off-chain processes Component(s) Conventional asset Reference asset Token Token
are needed and ownership claims are
systematically verifiable. If implemented well,
native tokens minimize operational burdens Issuance Asset is issued off-chain Asset is issued off-chain Token is issued on-chain Token is issued on-chain
and eliminate liquidity risks; however,
technology and governance risks increase as Proof of value Driven by issuer credibility Driven by issuer credibility Driven by issuer credibility
the asset can then have bearer-like
characteristics. While this model is currently
still in development in regulated markets, Proof of
Evidenced by off-chain records Evidenced by on-chain records Evidenced by on-chain records
ownership
trends indicate that it serves as the target-
state tokenization model for non-physical or
Proof of
electronic assets. Recorded off-chain Recorded on-chain Recorded on-chain
transaction

Custody Qualified custodian Qualified custodian Flexible custodial arrangements Flexible custodial arrangements

Redemption No token Token may be redeemable for the reference asset or its par value No reference asset

Example Public equities Physical gold (commodity) Sovereign digital bonds

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Off-chain On-chain
 Foundational key concepts Contents 10

Legal, operational and market Operationally, proof of value and redemption,

dynamics if applicable, carry some ambiguity. Reliance
on a reference asset necessitates off-chain
These two tokenization models provide third-party audits and coordination of dual-
the foundation for issuance and settlement or tri-liquidity pool management to ensure
driven by programmable ledgers, yet these sufficient backing and proof of value to cover
models are influenced by legal and the outstanding tokens and other buffers,
operational dynamics. such as liquidity coverage ratios. Redemption
depends on issuer and custodian operations.
From a legal perspective, the proof of
ownership, or a claim, over an asset may Another operational aspect is bankruptcy-
technically be evidenced by the programmable remoteness, which aims to protect customer
ledger. However, two challenges persist: assets if the issuer or custodian becomes
insolvent. Proper segregation of accounts and
Clear rules must be established legal structures ensures underlying reference
1
regarding the reconciliation and assets are separated from the issuer’s balance
synchronization of counterparties’ sheet, safeguarding investors and reducing
books and records against the counterparty risks.
programmable ledger to mitigate
discrepancies.

The state of ownership must be legally

2
enforceable, such as through a
rulebook. Currently, property and
ownership rights assigned to assets
outside programmable ledgers remain
legally uncertain.
 Foundational key concepts Contents 11

FIGURE 3
1.4 Token attributes
Token attributes
Six attributes – asset definition, embedded
rights, provenance (history), ownership status,
compliance rules and permission controls –
make financial asset tokens more transparent, ASSET DEFINITION OWNERSHIP STATUS
secure and efficient. By embedding key asset Clearly identifies the underlying asset, Accurately represents current holders
information into tokens, financial markets specifying its category (e.g. bond, or custodians of the token, including
could operate with reduced complexity, equity), issuer details, unique OWN explicit claims or encumbrances over
ITION ER
stronger investor protections and greater trust. identifiers, available quantity and F IN SH the underlying asset.
DE IP
characteristics essential for valuation, T ST
SE
accounting and trading.

AS

AT
US
CO
COMPLIANCE RULES

EDDED RIGHTS
EMBEDDED RIGHTS

MPLI
Encodes compliance requirements,
Details legal and economic
regulatory conditions and jurisdiction-

ANCE RULE
entitlements granted to the token TOKEN specific rules directly into the token,
holder, such as dividend payouts,
enforcing rules governing
voting participation, redemption
transferability, trading eligibility and

B
capabilities or interest payments.

M
legal adherence.

S
E

L S
PROVENANCE (HISTORY) PERMISSION CONTROLS

RO
PR T
O N
Provides a transparent, tamper-proof VE
NA CO Implements permissions within smart
N
and auditable record of the token’s N CE IS SIO contracts that specify and control
P ER M
origin, transaction history and previous user actions, allowing designated
ownership – all of which can be users or restricting actions
designated to authorized viewers or (e.g. transfers, freezing) based
publicly viewable. on predefined rules.
 Foundational key concepts Contents 12

1.5 Settlement assets FIGURE 4

The digital money continuum

In a financial transaction, the delivery of an
asset (D) typically requires a reciprocated
payment leg, whether in cash (the “P” in DvP) PUBLIC MONEY PRIVATE MONEY
or asset (the second “D” in DvD) form. This leg
is also referred to as a settlement asset, which Central bank money Reserve-backed money Commercial bank money Non-bank money Crypto-assets
is mutually recognized by transacting parties
as a final means to discharge obligations. Description A central bank liability A liability of a licensed A commercial bank A liability of a non-bank A native digital asset that
Choosing the right settlement asset involves can be used for non-bank FI or liability in the form of FI that holds a licence to is usually the utility token
balancing liquidity and counterparty risks with settlement purposes commercial bank backed deposits held at the issue e-money and can of a programmable
the speed needed to achieve settlement for in both physical and by reserves in an bank, which can be used be used to settle ledger and is used to pay
digital formats. omnibus account held for payment purposes. commercial transactions. for transaction fees.
the trading scenario. at a central bank.

Settlement assets include fiat-backed

Issuer/operator Central banks Commercial banks or Commercial banks Non-bank FIs Minted via blocks
stablecoins, reserve-backed digital
non-bank FIs
currencies, deposit tokens and wholesale
central bank digital currencies (wCBDC).5 Risk Virtually credit risk-free Bankruptcy-remote Carries credit and Carries credit and Carries settlement risk
Crypto-assets, such as Ether, are used as liquidity risk liquidity risk
settlement assets in decentralized exchanges
(DEXs) or Layer-2 networks. Users — General public — Bank customers — Bank customers — General public — General public
(commercial and (commercial and
— FIs retail) retail)

— Financial institutions

— Financial market
infrastructures (FMIs)

Examples — RTGS systems — Reserves-backed — Deposit token — Fiat-backed — Ether

digital currency* stablecoin
— Wholesale

Note: Reserve-backed money combines elements of — CBDC

both public and private money – while classified here
as private due to operation by private entities, it is
backed by public funds, namely central bank reserves. Source: World Economic Forum
Value proposition Contents 13

2 Value proposition
Tokenization offers five differentiating features that
are driving its value proposition in financial markets.
 Value proposition Contents 14

TA B L E 1

Differentiated features of tokenization

There are five differentiated technical features of tokenization.

FEATURE CONVENTIONAL TOKENIZATION BENEFITS RISKS

Shared system — Financial institutions use — Establishes unambiguous — Information symmetry – — Off-chain synchronization –
of record electronic messaging to cryptographic proof of the state ensures visibility and auditability, a new system of record can
coordinate transactions of the transaction.A driving the reduction of complicate harmonization with
Enhances
and update their own set of information asymmetry and a existing institutional books and
information — Allows for the automation of key
books and records based on reduction in reconciliations. records, possibly resulting in
symmetry functions, such as corporate
structured data.A further reconciliations or errors.
actions and asset servicing.B — Immutability and auditability –
— Multiple self-contained creates an immutable, tamper- — Reversals and clawbacks –
databases lead to inefficiencies resistant ledger that securely some networks do not natively
and manual reconciliations that records and verifies asset offer reversibility.
can lead to errors and delays. ownership, history and rights.C
— Data privacy and confidentiality
– the ability to comply with
certain measures, such as the EU
GDPR’s “right to be forgotten”.

Flexible — Virtually all financial assets — Enables self-custody through — Direct user control – allows — Cyberattacks – the risk of third-
custodial require intermediaries for private keys at the most individuals to have direct control party providers being attacked
arrangements safekeeping. fundamental level. over their digital assets and data, with malicious code and
driving privacy, portability and bypassing security.
Enables user- — Certain markets exhibit — Offers security options user autonomy.D
centricity centralization risk with few with multisignature and — Lost keys – the risk of users/
parties dominating market share. decentralized approaches. institutions misplacing or leaking
private keys.

Note: The table continues with additional features on the next page.
 Value proposition Contents 15

FEATURE CONVENTIONAL TOKENIZATION BENEFITS RISKS

Programmability — Disparate systems require — Encodes transaction logic and — Process automation – — “Paradox of programmability” –
external messaging/APIs for rules directly into smart contracts transforms point-solution trade-off of harnessing smart
Facilitates coordination, limiting ability to (self-enforcing code) and the automation to broader strategic contract efficiency and
operational integrate rules and conditions network’s operations. orchestrationF by embedding constraining the flexibility
efficiency into assets or arrangements. predefined conditions into assets, needed to react to or prevent
— Performs business logic automating transfers, compliance on-chain issues.G
— Processes payments based on predefined conditions, and event-based logic.
independently and relies on resulting in transfer of value — Off-chain functions – Table sources:
external messaging and APIs.E and information across — Reduced operational costs – requirements may require new
trading scenarios. efficiencies in administrative off-chain processes, thus A. Citigroup. (2024). Ready Layer 1: A general-purpose
processes reduces costs eroding the operational benefits.H state machine for the financial sector. Citigroup Global
associated with these Insights
transactions.
B. European Central Bank. (2021). Use of DLT in post-
trade processes
Asset — Administrative burdens often — Enables any asset to be — Reduction of administrative — Fragmented ownership – the
fractionalization C. Zellweger-Gutknecht, C. (2019): “Developing the
limit asset fractionalization divided into smaller units and burden – eases the challenge with coordinating
Expands because of additional effort made available under various administrative burden of making decisions or ensuring fair right regulatory regime for cryptocurrencies and other
accessibility required for functions such custodial models. assets available in divisible, governance practices. value data”, in S. Green and D. Fox (eds),
as asset servicing. smaller parts, lowering minimum Cryptocurrencies in public and private law, Oxford:
— Supports the ownership of investment thresholds. — Issuer restrictions – certain Oxford University Press, pp. 57–91
— Legacy systems do not always micro-units of value. issuers may not offer smaller
allow for ownership at the — Lower barriers to entry – lowers denominations of assets based D. Coinbase Institute. (2025). Why the future of finance
decimal level. barrier to entry for retail on regulation. calls for a permissionless architecture
investors, particularly in illiquid
and secondary markets. E. MIT Media Lab & J.P. Morgan. (2024). Application of
programmability to commercial banking and payments
Composability — Legacy infrastructure — Enables multi-asset operations — Collateral mobility – accelerates — “Limitless composability” –
requires manual workarounds for assets to be integrated, collateral reuse, extending asset repackaging assets can lead to F. Bank for International Settlements. (2024).
Promotes
for composability to ensure reused and transferred across usability across multiple trades. an infinite number of yield Tokenisation in the context of money and other assets:
multi-asset
sufficient linkage. platforms (e.g. DvD, DvP). aggregation and financial vehicle Concepts and implications for central banks.
mobility — Multi-asset coordination – strategies, leading to possible Committee on Payments and Market Infrastructures
— Siloed platforms limit asset — Allows the combination of unlocks multi-asset stability risks.
reusability. system components or discrete and multiparty settlement G. World Economic Forum. (2024). 'Code as law':
pieces of programmable code to opportunities on a — Interoperability risks – bridging, The tokenization of financial assets and the paradox of
— Rehypothecation and meet any use case across common platform. mint/burn, etc. not fully
collateral reuse are slow programmability
transaction types, such as liquid developed yet.
and operationally complex. staking and wrapped assets. — Asset fungibility – enables H. FEDS Notes. (2024). Tokenized assets on public
greater fungibility across
blockchains: How transparent is the blockchain?
assets and markets, facilitating
new economic linkages I. State Street. (2024). Asset tokenization now and in
and businesses.I the future
 Value proposition Contents 16

Shared system of record embedded custody, all building upon the user- derived using programmable functions to ownership of off-chain assets, such as real
centric self/non-custodial model. This enables automate actions. Smart contract execution estate or commodities.
The introduction of a shared system of record, user-centricity by providing direct control over can streamline asset servicing, enable liquidity-
underpinned by programmable ledgers and assets, identity and data through private keys, saving mechanisms, enhance price discovery
their consensus mechanisms, can drive Composability
in many cases removing the reliance on and improve settlement.8 Programmability
efficiencies corresponding to the reduction intermediaries such as custodians.6 However, prevents unilateral changes due to Tokenization introduces composability, or the
of information asymmetry, an aspect crucial if private keys are lost or compromised, then immutability, bolstering trust through ability to package and repackage system
to investor awareness. Tokenization the security of these models is undermined, standardized operations and ensuring components and portability, which is the ability
can facilitate placing relevant data from which is why industry efforts such as the transaction data is integrated within the token to transfer digital assets between different
financial transactions on-chain. In addition, this DeRec Alliance are driving adoption of private rather than relying on external integrations. platforms. These features promote multichain
allows for additional data to be tracked and key recoverability. Should keys or users be and multi-asset operations, which allow for
enables greater transparency of all information However, programmatic structuring could have
compromised through phishing or other improved collateral mobility and a potential
linked to any transaction, including the unintended consequences, including the
cyberattacks, on-chain financial products increase in liquidity due to the fungibility of
provenance of the asset. paradox of programmability – the idea that a
could have freezing functions built into assets. While composability contributes to
smart contract is constrained in its ability to
However, a shared system of record, or a so- their governing smart contracts to mitigate financial innovation, it presents a unique risk in
adapt to market events, such as contagion
called golden record, may yield unexpected and deter loss. limitless composability where developers could
effects, thus introducing systemic risk.9
challenges for financial institutions that already create and recreate a limitless number of
derivatives of on-chain products, resulting in
manage and synchronize with several systems Programmability
of books and records, internal and external Asset fractionalization potential misuse or non-compliant holding.
with counterparties. While there are examples Programmability is the enabling of smart
Conventional financial markets offer asset
of parallel, programmable ledgers and contract-driven code to govern how tokens
fractionalization, yet this feature is novel under
conventional systems operating, there needs are transferred and stored – allows going
the paradigm of the flexible custodial
to be clarity on the legally enforceable system beyond discrete automation by extending
arrangements. Tokenization also reduces
of record to determine the correct claim status the scope of automation with event-based
the administrative burden of offering smaller
of an asset on-chain. This ambiguity has of led triggers, conditions and actions on an
denominations of assets, a key limitation in
to “shadow records” being put in to record immutable ledger with embedded data
lowering investment thresholds. This expands
and manage asset ownership. and instructions in the token.7 Programmable
accessibility because financial institutions can
ledgers deliver concurrent, real-time
offer smaller denominations to investors while
communication to multiple parties,
Flexible custodial arrangements minimizing the operational burden of
reducing time pressures and aiding
processing a higher volume of activities, such
Tokenization enables flexible custodial deadline compliance.
as disclosures, asset servicing and compliance
arrangements, ranging from full custody to Putting more of the asset life cycle on-chain checks. Fractional ownership, however,
collaborative/shared custody to hosted/ facilitates operational efficiencies that can be can result in challenges when enforcing
 Value proposition Contents 17

TA B L E 2

Flexible custodial arrangements

COLLABORATIVE/SHARED HOSTED/EMBEDDED
ARRANGEMENT FULL CUSTODY SELF/NON-CUSTODIAL
CUSTODY CUSTODY

Description A third-party custodian holds and manages Requires multiple parties to approve Integrates custody solutions into applications Users retain full control over their private keys
private keys on behalf of users or institutions, transactions by distributing control using via APIs or SDKs, offering businesses flexible and digital assets without intermediaries,
making this ideal for institutional clients requiring multiparty computation (MPC), balancing digital asset management while leveraging requiring secure key management while
regulatory compliance, security and operational security and decentralization while reducing MPC for enhanced security and granting end ensuring full sovereignty and responsibility.
efficiency. reliance on a single entity. users some control.

Third-party custodian retains Designated users have End user has primary control, while the
Private keys End user retains full control
full control shared control wallet service provider acts as a backup

Signing patterns Multisig or MPC Multisig or MPC Multisig or MPC Single signer

Recoverability Yes Yes Yes No

Account structure Segregated or omnibus Segregated Segregated or individual Individual

Enterprise-level security Reduced risk of key loss Fast, efficient asset transfers Increased user control
Advantages
Reduced operational risk No single entity controls keys Recovery of keys possible Ideal for privacy

Centralization risk: single Operational complexity: Platform risk: possible No recovery: no ability to
Trade-off coordinating multiple custodians/signers
entity controls assets platform failures recover lost keys

Financial institutions that are transacting Institutions demanding a degree Retail investors prioritizing ease of access DeFi users and privacy-focused investors
Applicability
or storing a large value of assets of distributed security while remaining protected valuing full control

Risk Low Moderate Moderate High

Tokenized assets Contents 18

3 Tokenized assets
Tokenization can be applied across the asset life cycle, from asset issuance to
usage in secondary markets, including securities financing and asset management.
 Tokenized assets Contents 19

FIGURE 5
3.1 Use case patterns
Tokenization use case patterns
The sections below examine the impact of
tokenization on relevant asset classes.

1. Asset issuance Use case pattern #1: Asset issuance

The creation of financial instruments across
asset classes including public equities,
fixed income (sovereign, corporate,
municipal) and alternatives (private equity, Fixed income/debt Public equities Alternative assets
private debt, commodities). These assets
are issued in support of capital formation
and market access.
Sovereign bonds Corporate bonds Municipal bonds Private equity Private debt Commodities Real estate
2. Securities financing
Short-term transactions such as repos and
securities lending, where bonds, cash and
equities serve as collateral. These markets Precious metals Carbon credits
enable liquidity management, collateral
optimization and leverage strategies.

3. Asset management
The assembly of on-chain and off-chain
funds, spanning traditional and digital- Use case pattern #2: Securities financing Use case pattern #3: Asset management
native vehicles such as tokenized money
market funds and treasury funds to provide
diversified exposure for investors.
Collateral and repurchase agreement markets On-chain funds Off-chain funds*

*Noted as a set of products that bring on-chain assets into off-chain financial markets, such as crypto-asset exchange-traded products.
 Tokenized assets Contents 20

FIGURE 6

Tokenization-ready traits
There are eight key traits that help determine whether an asset is suitable for tokenization and which asset classes should be prioritized.

PHYSICAL FORM FACTOR INFRASTRUCTURE MATURITY

Assets locked in physical form, such as gold, Assets with low infrastructure maturity, including
benefit from secure immobilization and custody and exchanges, benefit from the “leap-
tokenization to drive tradability and liquidity. frog” potential of tokenization.

OPERATIONALLY INTENSIVE UNSTRUCTURED OTC MARKETS

Assets that carry high administrative burdens, Assets traded through unstructured channels
such as corporate actions or complex and over-the-counter (informal) markets benefit
ownership structures, benefit from from tokenization’s programmability and
programmability and a shared system of record.
WHAT MAKES composability to enable new trading venues.

AN ASSET
ASSET REUSABILITY TOKEN-READY? LIMITED DIVISIBILITY
Assets that can be repurposed or reused Assets trading or sold in large-value
across multiple trading steps, such as collateral increments, such as real estate or public
or liquid staking, benefit from the composable placement sovereign bonds, can benefit
features of tokenization. from fractionalization.

INSTITUTIONAL DEMAND REGULATORY READINESS

Assets in high demand by institutions and that Assets already governed under well-established
have familiar structures, such as MMFs and frameworks (such as ETFs and bonds) are
treasuries, benefit from the increased velocity easier to tokenize in a compliant way – these
offered by tokenization. will vary by region.
 Tokenized assets Contents 21

Regional considerations Current vs. target adoption

Regional differences will shape which asset Each asset class is following its own adoption
classes are tokenized first. Equities and path, ranging from tokenizing existing assets
bonds already operate rather efficiently in to issuing them natively on-chain. While any
advanced economies (AEs) but could benefit electronic asset can, in principle, be natively
from tokenization through improved access, issued, fixed income instruments – such as
liquidity and lower costs. In emerging market bonds – have advanced faster due to their
economies (EMEs), where markets are less simple structures and ability to be issued as a
liquid, tokenization can democratize access digitally native token. In contrast, real estate
across equities, fixed income and alternatives. and physical commodities are limited by their
In EMEs that have nascent existing financial off-chain nature and cannot be natively issued
infrastructure to invest in these products, this in the same way. Similarly, off-chain funds
could allow for “leap-frogging”. In most often take on-chain assets and wrap them
markets, real estate, private credit and PE into traditional structures such as exchange-
are difficult to access and invest in and traded funds (ETFs).
tokenization can create increased efficiencies.
Meanwhile, commodities such as precious
metals and carbon credits show region-
specific adoption based on market
maturity and regulation.
 Tokenized assets Contents 22

FIGURE 7
3.2 Asset issuance
Tokenized stocks
Equities Backed-issued stocks bCSPX, bCOIN and bNVDA represent almost 90% of tokenized stocks in value.

Public equities are shares of publicly traded

companies listed on stock exchanges and
offered to a broad investor base. The global
$18M
public equity market was valued at nearly
$115 trillion in 2023.10 The market
$16M
capitalization of tokenized public stocks
was estimated at nearly $16 million $14M
by March 2025.11
$12M
Current public equities markets in AEs are
already highly efficient and benefit from
$10M
decades of technology modernization and
proven intermediary chains delivering financial
$8M
services. Due to existing efficiencies in AEs,
tokenizing public equities may not be $6M
prioritized over other asset classes.12
However, opportunities exist, particularly in $4M
EMEs, to improve efficiencies and provide
access to equity markets.13 $2M

$0M
Jan 23 Mar 23 May 23 Jul 23 Sep 23 Nov 23 Jan 24 Mar 24 May 24 Jul 24 Sep 24 Nov 24 Jan 25 Mar 25

bCSPX bCOIN bNVDA sMSTR TSLA.d Others

Source: Blockworks Research, RWA.xyz

Tokenized assets Contents 23

These are examples of tokenization benefits in Tokenization is just one enabler for realizing
public equity markets: compliance of on- and off-chain data;
additional processes are usually also
1. Enhances information symmetry
necessary (e.g. identity checks and legal
Embedding IPO listing criteria directly into
checks). Despite these advantages, tokenizing
tokens can enhance distribution efficiency
already-efficient public equity markets,
and transparency.14 This could be beneficial
particularly in AEs, faces challenges. Public
as public firms demonstrate faster growth
equities today benefit from robust governance
after receiving equity because of superior
and efficient price discovery.19 To achieve
information efficiency by aggregating
adoption, tokenization must deliver substantial
known information into the stock price and
value and clarify where these assets would be
through robust governance mechanisms,
traded in new venues such as DEXs or other
improving the investor experience.15
digital trading venues.
2. Facilitates operational efficiency
Corporate actions represent capital
markets’ largest unstructured data
challenge, with more than 3.7 million event
announcements annually in the US alone
and costing each participant $3–5 million
annually.16

3. Expands accessibility
Traditional foreign public equity investments
involve costly processes such as
immobilizing stocks into depository CASE STUDY 1
receipts and incurring administration, Equities
custody and FX fees.17 Tokenization could
mitigate these costs by embedding
compliance directly into assets and
improving secondary market liquidity.18
Click to open
case study details
 Tokenized assets Contents 24

FIGURE 8
Fixed income Sovereign bonds
A growing number of issuers are experimenting with Government or sovereign bonds are debt
Fixed-income securities are debt instruments tokenized bonds securities issued by national governments,
issued by a government, corporation or other often considered low-risk investments and
entity to finance their operations. They provide Commercial vs. sovereign, supranational and agency tokenized bonds
used as benchmarks for interest rates. They
investors with a return in the form of fixed are critical for funding government operations
periodic payments and the eventual return of and old debt or interest. They also play
the principal at maturity.20 The global fixed- an integral role in institutional portfolios,
income, or bond, market was valued at providing predictable returns and aiding in
approximately $140.7 trillion in 2023.21 Fixed- 4 20 retirement planning.24
income tokenization has seen notable
advances in sovereign, corporate and 3 15 Government authorities are gradually

No of bonds
endorsing tokenized public debt, evidenced by

$ billion
municipal bonds.
2 10 His Majesty’s Treasury’s plans for a digital gilts
According to an Official Monetary and pilot in the UK Finance’s comprehensive
Financial Institutions Forum (OMFIF) survey of 1 5 roadmap,25 the US Commodity Futures
26 financial institutions, 65% believed that Trading Commission acceptance of tokenized
bonds were the most likely to be tokenized.22 0 0 treasuries as non-cash collateral26 and the US
For example, the European Investment Bank Treasury’s acknowledgment of potential
2019 2020 2021 2022 2023 2024
(EIB) has issued several bonds on-chain, operational benefits.27 In Hong Kong, the
proving the feasibility of tokenization. Since government has committed to the issuance of
2021, with its inaugural digital bond issued on tokenized bonds as standard practice. The
Ethereum, the EIB has issued five bonds, most Hong Kong Monetary Authority (HKMA) is
recently using HSBC’s Orion platform for Cumulative amount issued (left-hand side): Cumulative issuances (right-hand side): preparing to issue the third tranche of
issuance and the Banque de France’s DL3S tokenized bonds, while actively exploring
Commercial
platform for settlement.23 tokenizing existing bonds.28 Collectively, there
Sovereign, supranational and agency
is a progressive shift towards adopting
tokenization for sovereign securities.

Based on the subset of tokenized bonds with an available International Securities Identification Number (ISIN).

Source: Aldasoro, I., Cornelli, G. Frost, J., Koo Wilkens, P., & Shreeti, V. (2025). Tokenisation of government
bonds, mimeo
 Tokenized assets Contents 25

Corporate bonds For example, the Societe Generale FORGE Municipal bonds take up to 12 weeks, save 800–1,000
in France has demonstrated how tokenized person hours during issuance and reduce
Corporate bonds are issued by companies corporate bonds can comply with regulatory Municipal bonds are issued by local or book-closing periods by more than 50%.35
to raise capital, offering varied yields and requirements while benefitting from on-chain regional governments to fund public projects,
risk levels depending on the issuer’s settlement efficiencies.29 Nomura’s partnership often providing tax advantages to investors. 3. Expands accessibility
creditworthiness. Tokenized corporate bonds with BOOSTRY in Japan illustrates a growing The Six Digital Exchange (SDX) announced Conventional bonds have high minimum
represent a form of debt in capital markets, regulatory acceptance of tokenized corporate in May 2024 that it had achieved more than buy-in thresholds, limiting investor access.
enabling fractional ownership, streamlined bonds, reflecting a global innovation trend in 1 billion Swiss francs ($1.2 billion) in assets Tokenization can lower this barrier by
settlements and broader investor access. financial assets.30 on its digital asset platform. Part of the fractionalizing the assets and easing the
success of these digital bond issuances operational burden. Low investment
on its platform is due to the availability of thresholds with conventional bonds have
atomic settlement (e.g. DvP), using tokenized operational burdens, including paperwork
FIGURE 9 central bank money as part of the Swiss and resource costs. Lowering thresholds
National Bank’s wCBDC limited phase pilot.31 in public markets could increase the
Global issuance of DLT-based bonds in billions of euros likelihood of regulatory limitations.
and by location Examples of tokenization benefits in fixed-
income markets include:
Global issuance of DLT-based bonds (in EUR Bn) % of total issuance volume DLT-based bonds by location
(since 2021)
1. Enhances information symmetry
1.3 Bonds can be tokenized to create and
0.3% track metadata across the following
EU 31% 21% parameters: issuance amount, maturity,
coupon, features and corporate actions,
0.9 0.8
US approved operators and transfer
conditions.32 CASE STUDY 2
APAC 10%
2. Facilitates operational efficiency Fixed income
Switzerland Tokenized bonds lowered underwriting
0.3
38% fees by an average of 0.22% of the bond’s
Rest of world par value, reducing 5.3% bid-ask spreads
2021 2022 2023 2024 (Aug) on average and with the efficiencies Click to open
compounding when including retail.33 case study details
DLT can automate up to 2,000 tasks in
Source: Association for Financial Markets in Europe. (2024). Use of DLT and tokenisation in financial markets the bond issuance process,34 which can
Tokenized assets Contents 26

Alternative assets The following benefits could be achieved: However, private markets derive much of their
value from the individual nature of deals, which
1. Enhances information symmetry
require research and structuring to deliver
Private equity Tokenization can drive increased data
investor value. Tokenization may not always be
sharing and adding disclosures to PE can
Private equity (PE) is ownership stakes in necessary to achieve benefits. For example,
drive more transparency in the currently
companies not listed on public exchanges, EquityZen and Forge Global are two
opaque private markets.40
typically held by institutional investors and marketplaces offering retail investors a
requiring longer investment horizons in 2. Facilitates operational efficiency minimum investment threshold of $5,000 and
exchange for potentially higher returns. The Tokenization, if applied, should reduce they do not use DLT.43
size of the global PE market reached frictions associated with operational and
approximately $5.3 trillion in 2023 and shows technological aspects instead of altering
signs of continued growth.36 Some projections the deal-structuring and relationship-based
are for the total PE/venture capital market to nature of these markets.
grow to $7 trillion by 2030, with roughly 10%
3. Expands accessibility
being tokenized by that same time.37
For example, in 2021, ADDX tokenized
PE markets are considered less efficient than units from Partners Group’s €5.5 billion
public markets due to limited information flow ($6.2 billion) PE fund, allowing fractional
and transparency. Investment in private investments as low as $10,000 (previously
markets relies heavily on intermediaries (fund $100,000-plus), greatly expanding
managers) to source and evaluate deals, investor accessibility via lower minimum
resulting in performance disparities.38 investment thresholds and complying with
regulatory standards.41
Tokenization has emerged as a potential
solution to these inefficiencies by digitizing Several firms have already taken steps to CASE STUDY 3
ownership in funds or companies. Industry tokenize PE investments. Recently, Aurum
research shows that 73% of European fund Equity Partners launched the world’s first Private equity
managers anticipate that PE will be the first combined PE and debt tokenized fund valued
asset class to experience significant at $1 billion on the XRP Ledger, an open-
tokenization, driven by a need to improve source and decentralized Layer-1, to drive
liquidity, transparency and accessibility.39 worldwide data centre investment, enabling Click to open
enhanced investor access and liquidity case study details
through secondary markets.42
 Tokenized assets Contents 27

Private debt Examples of the benefits of tokenization for FIGURE 10

private debt include:
The terms “private debt” and “private credit” Tokenized private credit by issuer
are used interchangeably and refer to non- 1. Enhances information symmetry
Transaction flow would be in real time, Figure represents almost 80% of the value of outstanding tokenized private loans
bank lending or bonds outside traditional
markets used to fund private businesses.44 providing data on underlying assets
The global private credit market has surpassed at all times.49
$3 trillion in assets under management
2. Facilitates operational efficiency
(AUM).45 This asset class consists of higher-
Smart contracts reduce and mitigate back-
risk loans with higher-interest rates than
office costs and lower transaction costs
conventional debt. Unlike public debt, private
and management fees. $14M
debt is issued by non-bank entities or
individuals to raise funds or form capital. 3. Expands accessibility $12M
Easing the process of buying into private
Private debt can attract investors, offering $10M
credit funds and of trading shares can
higher returns and risk. Private-sector leaders
increase the range of investors. For $8M
believe private debt will be the first asset class
example, in 2022, KKR collaborated with
to be tokenized and routinely traded.46 About $6M
Securitize to tokenize a segment of its $4
70% of private-debt investors are institutional
billion healthcare fund on Avalanche, $4M
investors or entities investing on behalf of an
reducing investment minimums and
individual, typically a private credit fund.47 $2M
onboarding accredited investors,
Most private loans on-chain are direct loans to increasing reach.50 $0M
institutional crypto investors. These loans 23 r23 y 23 23 ep 23 23 24 r24 y 24 24 ep 24 24 25 r25
On-chain activity for private debt/credit is Jan M a Ma J u l S Nov Jan M a Ma J u l S Nov Jan M a
mostly appeal to high-net-worth individuals
increasing but is largely limited to crypto-
and accredited investors as yields range from
assets and select corporate bond issuances.
9% to 20%. However, they carry risks in that
Protocols such as Maple, Goldfinch and
the collateral posted is limited in diversity.48 Figure Tradable Maple PACT MB | Mercado Bitcoin Others
Centrifuge have driven more than $13 billion in
Because crypto-assets such as Ethereum
on-chain loans in public networks, including
back most loans, significant market
Ethereum and Solana.51
corrections of these assets could affect the
lending positions of the holders.

Source: Blockworks Research, RWA.xyz (2025)

Tokenized assets Contents 28

Real estate information regarding records and

their verifiability.
Real estate as an asset class refers to
investments in real property and is 2. Expands accessibility
characterized by its physical nature and This process can streamline transactions
potential for both income and capital by reducing intermediaries and
appreciation.52 The global real-estate market administrative overhead, making real-
was valued at approximately $379.7 trillion at estate investment more accessible.54
the end of 2022, encompassing residential,
However, regulatory uncertainties between
commercial and agricultural properties.53
jurisdictions and technological integration
Tokenizing real estate involves converting issues exist. Outstanding design choices
property ownership into digital tokens on a remain related to the impact of tokenizing real
programmable ledger, facilitating fractional estate on the local economy and deed
ownership and potentially enhancing liquidity transferability.55 Existing investment vehicles
in this traditionally illiquid market. The total such as real estate investment trusts (REITs),
value of real estate brought on-chain is ETFs and direct funds offer similar benefits,
estimated to be between $4 billion and $20 potentially limiting the appeal of tokenization.
billion, underscoring a large remaining Despite these hurdles, successful cases
addressable market. demonstrate the potential of this approach to
democratize real-estate investment.
Real estate could benefit from tokenization
for these reasons:

1. Enhances information symmetry

Today’s real estate markets are isolated CASE STUDY 4
and do not have connected systems of
record. Tokenization could help with Real estate
streamlining these records for stronger
information symmetry. For example, a
district administration in India digitized
700,000 land records dating back to 1950 Click to open
on the Avalanche blockchain, addressing case study details
challenges associated with requests for
 Tokenized assets Contents 29

Commodities wider range of participants – such as retail FIGURE 11

investors – to gain gold exposure.
A commodity is a physical good attributable to Tokenized commodities by product
a natural resource that is tradable in physical 2. Enhances user-centricity
Paxos’ PAXG and Tether’s XAUT, both tokenized gold products, account for 99% of the tokenized
(spot) markets and in future and forward Through mobile applications and more
commodity market
markets.56 The nominal value in the flexible custodial arrangements, the ease
commodities market is projected to reach of holding gold or the exposure to gold
$142.85 trillion in 2025.57 improves as compared to investing
in gold today.
Precious metals $1,400M

Precious metals are valued for their scarcity 3. Promotes multi-asset mobility
$1,200M
and used as hedges against inflation and Tokenization of gold could allow free usage
economic uncertainty. The tokenization of as collateral without traditional limitations $1,000M
precious metals, particularly gold, has become such as storage.59
$800M
a significant use case in financial markets. The
As highlighted in the section on backed
total capitalization of the physical gold market, $600M
tokens, gold-backed tokens are not without
excluding the jewellery market, is estimated at
their hurdles and risks. $400M
$5 trillion in 2024.58 While traditional methods
of investing in gold, such as physical gold, A leading challenge is integrating physical and $200M
coins and ETFs, have existed for years, digital worlds, especially securing and storing
tokenization offers a unique opportunity to metal or stone.60 Today’s model relies heavily $0M
broaden access to gold. on custodians’ safekeeping and auditors r 21
n 21 p 21 c 21 r 22 n 22 p 22 c 22 r 23 n 23 p 23 c 23 r 24 n 24 p 24 c 24 r 25
verifying reserves, potentially creating Ma Ju Se De Ma Ju Se De Ma Ju Se De Ma Ju Se De Ma
Several organizations have introduced gold-
concentration risk. Due to operational
backed digital tokens, including Paxos, Tether,
challenges, not all gold-backed token
WisdomTree and HSBC. PAXG XAUT Tokenized Gold (Others) Tokenized Silver (TXAG)
providers offer physical redemption. Fractional
The following opportunities are presented with ownership is possible, but physical redemption
depends on the issuer. Tokenized Platinum (TXPT)
gold-backed tokens:

1. Expands accessibility Gold-backed tokens’ continuous, 24/7 nature

Gold-backed tokens make it possible for can cause price dislocations when integrated
investors to purchase fractional amounts, with conventional markets, which operate only
lowering the entry barrier and enabling a Monday through Friday.
Source: Blockworks Research, RWA.xyz. (2025)
 Tokenized assets Contents 30

TA B L E 3

Comparison of gold investment vehicles

MODEL DESCRIPTION ADVANTAGES TRADE-OFFS

Physical bars Tangible ownership of gold bars or coins — Direct exposure to tangible asset — High storage and security costs
and coins purchased from dealers, mints or
— Minimal to no counterparty risk — Limited liquidity
secondary markets.
— High spreads

Vaulted physical Investor owns allocated or unallocated gold — Professional storage and security — No direct ownership
gold stored in vaults. They receive a claim/
certificate rather than holding metal. — High liquidity and trading availability — High minimum investments
— Custody, redemption fees

Gold contracts Standardized contracts to buy/sell gold on — No storage or security costs — No direct exposure
(futures) a set future date, traded on regulated
commodity exchanges. — Highly liquid and ease of trading — Settlement cycle-dependent

Gold ETFs ETFs that track the gold price and usually — Low transaction costs — Reliance on custodians
hold physical gold or futures contracts.
— Transparent pricing — Liquidation depends on exchanges
— Enables creative investment strategies, — Inaccessible for those in regions with
such as leveraging gold exposure underdeveloped financial infrastructures
through derivatives or use of collateral
— Supply-chain challenges for CASE STUDY 5
physical redemption
Precious metals
Gold-backed Digital tokens on a programmable ledger — Fractionalized and easily accessible — Potential for price dislocation during
tokens that represent a claim on physical gold weekend trading
stored by a custodian. — Continuous trading availability
— Platform and custodian risk
— Traceability and verifiability
— Supply-chain challenges for Click to open
— Instant and atomic settlement physical redemption case study details
 Tokenized assets Contents 31

Carbon credits FIGURE 12

Carbons credits (CCs) are tradable permits The carbon offset life cycle
that represent the right to emit a specific
amount of carbon dioxide (CO2), supporting
global efforts to reduce emissions. The global
CC market is valued at around $1.4 billion.61
A carbon credit is a financial asset that
represents ownership of 1 metric ton of CO2

SUPPLY
equivalent and can be traded or sold to meet
a mandatory emissions cap or a voluntary Project creation/ Project registration/ Offset serialization
development verification and issuance
emissions reduction target.62 CCs are integral
to both compliance and voluntary carbon Offset standard Offset standard
Offset project developers
markets, enabling entities to offset their and verifier registry
greenhouse gas (GHG) emissions.63

As a standardized measure for emissions,

these credits are used by corporations to
counterbalance their GHG emissions
Offset transaction Offset retirement
stemming from operations.64 CCs can be
tokenized – whether natively issued on a
programmable ledger or immobilized off-chain Exchanges, brokers, FSI Corporate/F&I + registry
DEMAND

and issued on-chain.

As of 2023, more than 3,400 companies Offset demand GHG inventory Offset identification
have committed to net-zero emissions, with
the VCM valued at approximately $723 Corporates/ Third-party consulting or Corporates, consultants
million.65 However, only 188 companies sovereigns engineering firm
actively invest in carbon dioxide removal
(CDR), highlighting a gap between
commitments and tangible actions. The
market size for VCMs is around $2 billion,
with conservative estimates putting it at
$50 billion by 2050.66
Source: Accenture (2024)
 Tokenized assets Contents 32

A leading example is AirCarbon Exchange CCs have faced scrutiny due to concerns
(ACX), a global platform changing the about overstated emission reductions and the
VCM by providing a transparent, efficient actual impact of offset projects. To address
trading system for environmental assets.67 this, the Integrity Council for the VCM (ICVCM)
Another example is the recently successful introduced the Core Carbon Principles to
proof-of-concept pilot of using tokenized enhance buyer confidence by ensuring
deposits to settle carbon credits, led by rigorous baseline fuel determination and usage
Standard Chartered, Mox Bank, Mastercard monitoring. To advance the development of
and Libeara.68 carbon credits using DLT, the InterWork
Alliance’s Voluntary Ecological Markets set
The CC market could benefit from tokenization forth principles for further collaboration.69
for the following reasons:
CCs can vary in quality, prompting standards
1. Enhances information symmetry bodies to implement stringent issuance and
Tokenizing CCs can enhance transparency, trading standards to prevent low-quality CCs
traceability and liquidity in carbon markets. from entering markets. While tokenization
This process streamlines issuance, trading alone cannot fully address these challenges
and retirement, reducing administrative due to operational and human factors,
costs and minimizing risks such as double- integrating smart contracts with robust
counting and greenwashing. governance can standardize and enhance
2. Facilitates operational efficiency the quality of tokenized CCs.
Smart contracts automate transactions,
ensuring compliance with regulatory
standards and boosting market efficiency.

3. Expands accessibility
Tokenization democratizes access,
allowing individuals and smaller
organizations to participate in carbon
offset initiatives, broadening market
reach and impact.
 Tokenized assets Contents 33

Total Collateral Network (TCN), HQLAx and the price. Repos are a common way for financial instant transfers of ownership.78
3.3 Securities Canton Global Collateral Network (GCN), institutions to obtain short-term funding.76 The Programmability can automate asset
financing which all aim to address the historical
challenge of orchestrating complex cross-
global repo market is very large, with an
estimated size of more than $15 trillion in
servicing and maintain a shared record to
ease operational burdens associated with
custodian movements of collateral, or the outstanding value and a daily turnover of maturities, dividends and coupon
Securities financing transactions allow
transfer of ownership countries between around $3–4 trillion.77 payments.
investors and firms to use assets, such as the
custodians through real-time, compliant and
shares or bonds they own, to secure funding Due to their high turnover, repo markets face 3. Promotes multi-asset mobility
interoperable asset mobility between traditional
for their activities.70 several inefficiencies and risks. Manual and Allows participants to extend asset
and digital markets.74 This fragmented
fragmented workflows rely on outdated and usability through digitally represented
custodian landscape tends to be costly and
disconnected systems, leading to delays,
Collateral dependent on non-overlapping operating
errors and costs. Additionally, settlement
collateral across subsequent transactions
hours. Collateral mobility is measured by a by using the platform’s programmable and
This report identifies collateral and repurchase inefficiencies are born from the many composable smart contracts. For example,
participant’s ability to identify the right
agreements (repos) as a key application of intermediaries coordinating complex a pilot on the Canton Network with
collateral to be moved to the right party
tokenization. The global collateral market is transactions – rapid buy and sell orders – that Euroclear and the World Gold Council
at the right time.75
estimated to be worth more than $25 trillion.71 have led to longer settlement cycles, liquidity found that gold-backed tokens allow freer
Collateral refers to what is posted and received constraints and counterparty risks. usage as collateral.79 SDX and SIX
Acceptable collateral frameworks
– typically a liquid and secure asset – pledged Securities Services are bringing to market
Tokenization offers three benefits for collateral:
to support a financial transaction, providing Current regulatory frameworks and jurisdiction- the new Digital Collateral Service (DCS),
default protection. Collateral is fundamental to specific rules limit which investors can hold, 1. Enhances information symmetry specifically designed to enable the usage
managing counterparty risk and ensuring the pledge or accept collateral, which hinders Money market funds (MMFs) are not of selected crypto-assets as collateral
smooth functioning of financial markets by efforts to trade collateral across borders. directly used as collateral because of alongside traditional collateral.80
mitigating credit risk. The ideal collateral Policy-makers and the private sector should data reconciliation challenges between
should be free from credit and liquidity risks, clarify the set of eligible tokenized collateral, counterparties driven by their complex
maintain a stable value and not correlate with including potentially expanding the scope of ownership structures. Tokenization’s CASE STUDY 6
the provider’s credit risk.72 acceptable collateral. shared system of record could bring
visibility into the custodial relationship
Repurchase agreements
Programmable ledger-powered collateral with underlying fund owners, reducing
Repurchase agreements
management could unlock more than $100 the burden of managing relationships
billion annually in capital that can be Intraday repo is observed as the primary area between transfer agents, custodians
redeployed for higher efficiency.73 This of adoption of tokenization. A repo is a short- and counterparties. Click to open
objective of improving collateral mobility is at term loan where one party sells securities to case study details
the heart of emerging tokenized collateral another in exchange for cash, with an 2. Facilitates operational efficiency
management platforms, such as JP Morgan’s agreement to buy them back later at a higher Enables real-time position tracking and
 Tokenized assets Contents 34

FIGURE 13
3.4 Asset
Tokenized US Treasuries by product
management
Funds $2.0B

$1.8B
Two primary fund structures are relevant to
$1.6B
tokenization: on-chain funds, which tokenize
conventional assets, and off-chain funds, $1.4B
such as ETFs, that invest in programmable
$1.2B
ledger-native assets.
$1.0B

On-chain funds $0.8B

On-chain funds represent traditional assets as $0.6B

digital tokens on a programmable ledger, $0.4B
facilitating broader investor access on new
digital channels and direct trading without $0.2B
central clearing parties. This approach is $0M
intended to reduce operational costs and Jan 24 Feb 24 Mar 24 Apr 24 May 24 Jun 24 Jul 24 Aug 24 Sep 24 Oct 24 Nov 24 Dec 24 Jan 25 Feb 25 Mar 25
broaden investor access. On-chain funds
today are backed by off-chain reference assets
or tokenized versions of traditional securities.
Estimates indicate that tokenized treasuries BlackRock USD Digital Liquidity Fund (BUIDL) Ondo US Dollar Yield (USDY) WisdomTree Gov. Money Market Fund (WTGXX)
have grown from $104 million to $5 billion in
market capitalization since 2023.82 Examples
Hashnote Short Duration Yield Coin (USYC) Ondo Short Term US Gov Bond (OUSG) OpenEden (TBILL)
such as Franklin Templeton’s Benji and Ondo
Finance’s USDY have succeeded in bringing
off-chain treasuries and other high-quality Franklin Templeton Gov Money Fund (BENJI) Superstate Asset Trust (USTB) Others
liquid assets (HQLA) on-chain.

Source: Blockworks Research, RWA.xyz. (2025)

 Tokenized assets Contents 35

FIGURE 14 However, a future trajectory points towards the — In June 2024, Fidelity International
development of funds composed of natively tokenized shares of an MMF on Kinexys
Traditional funds vs. tokenized funds
issued digital assets. Such a shift could Digital Assets, piloting a tokenized MMF
improve transparency in the complex on the Tokenized Collateral Network (TCN).
ownership structures of instruments such as The fund’s transfer agent (JP Morgan) and
Fund Tokenized fund: Recording fund share MMFs. Greater clarity around ownership the TCN coordinated the tokenization,
ownership in blockchain claims may enhance the suitability of MMFs which improved efficiency in delivering
for use as collateral, potentially supporting margin requirements and reducing
broader adoption. transaction costs and operational frictions
Investors Implications by serving as collateral in clearing and
There is, however, limited evidence so far margining transactions.84
to suggest these funds significantly reduce
Owns Owns
costs, such as fund administrator fees, — In January 2025, Fasanara Capital
Allow instant fund when compared to conventional models. introduced its first tokenized MMF, the
ownership
changes, enabling Often, these funds also provide investor Fasanara MMF Token (FAST), on the
Transfer Tokenized Tokenized
Fund A shares Fund B shares Fund B shares secondary transfer of returns that are more in line with their Polygon blockchain in collaboration
agents Fund A shares
funds through use of conventional counterparts. with Tokeny and others. This fund
blockchain …
Represent ownership Represent ownership offers investors enhanced efficiency
Notable examples include: and transparency in money
market investments.85
— In 2021, Franklin Templeton launched the
Fund legal entity Fund legal entity
… while avoiding Franklin OnChain US Government Money
Asset
managers Underlying 1 (e.g. Stock A) Underlying 1 (e.g. Stock A) impact on the Fund (FOBXX), the first US-registered
operations for
mutual fund to use a public programmable
underlying assets,
Underlying 2 (e.g. Stock B) Underlying 2 (e.g. Stock B) given that existing ledger for transaction processing and share
process and ownership recording.83 Initially on the CASE STUDY 7
infrastructure can be Stellar network, the fund expanded to
Money (e.g. HKD, USD) Money (e.g. HKD, USD) leveraged On-chain fund
other programmable ledgers, including
Avalanche and Polygon, demonstrating
... ...
adaptability. BENJI is the user-facing portal
for retail investors to buy and hold shares
of FOBXX using digital wallets, and BENJI Click to open
case study details
tokens represent ownership in FOBXX and
are recorded on-chain.
Source: Boston Consulting Group
 Tokenized assets Contents 36

Off-chain funds
Conversely, off-chain funds such as ETFs
provide exposure to digital assets without
directly holding them on a programmable
ledger. The crypto-asset ETFs are not
tokenized financial products, though they are
covered in this report to capture an expansive
view of the integration of tokenized and
traditional markets.

By November 2024, the spot crypto-asset

ETFs worldwide reached approximately $136
billion in AUM, with the United States
accounting for nearly 95% of this total.86
These funds invest in cryptocurrencies such
as Bitcoin (BTC), Ethereum (ETH), offering
traditional investors a familiar TradFi vehicle
to access the crypto market. For instance,
Franklin Templeton filed for an ETF to track
the spot price of Solana, indicating a growing
interest in diversifying crypto-asset offerings.87
Barriers to adoption Contents 37

4 Barriers to adoption
Tokenization’s success relies on overcoming several
barriers that exist in financial markets today.
 Barriers to adoption Contents 38

FIGURE 15
4.1 Traditional 4.2 Global standards
Common token standards (EVM)
financial infrastructure Global tokenization adoption requires robust,
harmonized standards. A lack of widespread
One path for driving network effects and industry collaboration and fragmented
liquidity is the integration of tokenized markets innovation is cited as a major factor in
with conventional systems. A challenge faced stymying the progress of the adoption of ERC-20 ERC-721 ERC-1155
by financial services institutions is the tokenization.89 Estimates show 74% of DLT
reconciliation between the books and records projects in 2023 had fewer than six
of tokenized systems and their internal books, participants, underscoring a need for wider
resulting in possible discrepancies or disputes participation.90 Furthermore, while the legal The fungible The non-fungible Multi-token
on the official claim of the asset. Addressing and technical enablement of tokenization is token standard token standard standard
challenges such as these requires a staged foundational, only the engagement of market
approach to using existing investments participants will advance adoption.91
in supranational networks to secure ERC-1400 ERC-3643
transactions between traditional and tokenized Five critical areas that would need to align
systems. This can avoid costly new for widespread usage are: roles and
infrastructure, spur confidence, reduce risk responsibilities, token standards, the cash
The compliance-
and accelerate adoption. leg and settlement, cross-chain interoperability
Security token aware token
and reference data.92 Standardization will
standard standard
Financial institutions can incrementally adopt require time and deep dedication and will
tokenized assets by connecting public possibly be performed in a staged manner to
programmable ledgers to their existing allow incumbents and digital natives to adapt. CMTAT ERC-1450 ERC-2980
infrastructure, beginning with non-cash assets For example, the Hong Kong Monetary
and scaling as new forms of on-chain value Authority convened a Programmability Working
emerge. For example, Chainlink, Swift and Group in 2024 to develop a common standard
UBS Asset Management enabled tokenized Issuing and trading
for programmability at scale. The system can
Swiss-compliant SEC-compliant Swiss compliant
fund transactions via Swift, reducing realize transformative benefits by uniting
standard securities asset token
inefficiencies in the $63 trillion global mutual around standards and inspiring global
fund market.88 efficiency while boosting adoption and trusted
market participation.

Source: Nethermind & PwC Germany. (2025). Tokenization Standards: The Missing Link for Institutional Adoption.
 Barriers to adoption Contents 39

Token standards are an important aspect of fractionalization offering only partial relief
this global harmonization. ERC-20 today
4.3 Cross-chain 4.4 Secondary due to administrative costs; regulatory hurdles
remains the dominant token standard, yet it
lacks built-in compliance features.93 It is for this
interoperability markets hindering cross-border trading and
collateralization; investor access often
reason that compliance-led tokens, such as restricted to institutions; and listing fees
Interoperability across private and public In primary markets, assets are initially issued
ERC-1400 and ERC-3643 (T-REX Protocol), discouraging dual-listing strategies, which
ledgers ensures seamless asset movement. and purchased. Secondary markets involve
are gaining traction: traditionally boost liquidity – though UBS
Financial services entities had adopted at least trading after initial issuance. Today, there is a
notably dual-listed a digital bond on both
— ERC-1400 allows for enhanced document 72 distributed or programmable ledgers as of lack of sufficient secondary-market liquidity
SDX and the SIX Swiss Exchange in 2022.100
management and investor protection, May 2025 and driven 10 market forces that and depth for tokenized assets.96
Enabling this is SIX’s bidirectional bridge
lending itself more to securities. are accelerating the deployment of individual
Secondary markets are critical to liquidity, yet between traditional and digital central security
networks.94 These networks are not all
— ERC-3643 embeds identity, know your tokenized assets struggle to establish market depositories (CSDs) that enables assets
inherently interoperable and the importance
customer/anti-money laundering (KYC/ depth.97 Many tokenized assets could not yet to be issued, custodied or transferred on
of cross-chain interoperability is underscored
AML) and transfer conditions, unlocking attract sufficient secondary trading volume, either venue.
to realize inter-network activity.
new approaches to on-chain compliance. leading to illiquidity and difficulty in accurate
Fragmentation risks emerge when providing
Emerging techniques reduce concerns pricing. In fixed income, more than $15 billion
Token standards should continue to evolve liquidity, such as settlement assets, for
regarding cross-chain interoperability, notably in tokenized assets – bonds, structured
towards established regulatory frameworks, secondary-market trading. For example,
“honey-pot attacks”, which result from non- products, commercial papers and funds –
such as Markets in Crypto-Assets Regulation Target 2 is used in the Eurozone to provide
canonical bridging. To mitigate this, Chainlink’s have been issued, as of 2024. However,
(MiCAR) in the Eurozone. security settlement services for all CSDs
collaboration with ANZ Bank, which nearly half of these initiatives report turnover
in the jurisdiction. Furthermore, introducing
successfully linked a private ledger to a public below $1 million, highlighting a significant
another on-chain cash system for a distinct
programmable ledger using the Cross-Chain gap between expectations and actual
secondary market could fragment the unity
Interoperability Protocol (CCIP), showed the activity.98 Therefore, an implicit illiquidity
of cash for settlement.
potential for cross-chain liquidity. LayerZero premium can be applied to tokenized assets
has created its Omnichain Fungible Token in today’s markets. However, there is a lack of Market makers require incentives to provide
(OFT) standard, which transfers fungible secondary-market data to fully demonstrate liquidity and inspire capital formation. Dual-
tokens across programmable ledgers without the benefits and drawbacks of the usage of listing can benefit issuers who seek to issue in
asset wrapping or middle chains.95 tokenized assets.99 their native jurisdiction, whether because of
compliance requirements or allegiance to a
Prominent barriers include insufficient
target jurisdiction, to drive turnover with a
incentives for market makers to provide
dedicated pool of investors. Lastly, despite
liquidity in predominantly over-the-counter
programmable ledgers’ inherent
(OTC) markets; high minimum investment
decentralization goals, liquidity remains
thresholds in private placements, with
fragmented across platforms.
 Barriers to adoption Contents 40

Although anonymity provides better privacy crypto (by blending or shuffling transactions), sensitive data. Additionally, compliance with
4.5 Privacy and safeguards in theory, it poses risks to KYC and users can mostly stay anonymous – even the FATF’s Travel Rule is heightened when
compliance AML compliance as it could allow bad actors
to obfuscate on-chain illicit activities, which
though wallet addresses are partly visible.
Another hurdle is quantum-safe PETs, as not
handling tokenized asset transactions, and the
number of jurisdictions requiring compliance in
amounted to nearly $25 billion in 2021.105 all PETs are protected against quantum the form of tracking originator and beneficiary
Fragmented identity verification limits the
attacks, which can break encryptions and leak data in an on-chain setting is growing.110
growth of tokenized financial products. Customer and transaction identification is
Standardized KYC is estimated to improve essential for complying with KYC, AML,
onboarding efficiency by up to 90% in fund sanctions and the Travel Rule, making
management.101 On-chain identities offer anonymous transactions unsuitable for
potential but raise privacy concerns. regulated markets.106 To address this, token TA B L E 4
standards such as ERC-3643 and ERC-5564
Privacy is the capacity for individuals or Advantages and trade-offs of allow- and deny-list models
are emerging. ERC-3643 enables compliant
organizations to dictate how and when
transfers based on on-chain identity, while
their data is shared and is based on the
ERC-5564 supports privacy through stealth
principle of individuals controlling the degree
addresses and dynamic address generation.107 MODEL ADVANTAGES TRADE-OFFS
to which they selectively express themselves
Tokeny’s DINO protocol uses ERC-3643 to
digitally, including identifiers such as age,
facilitate compliant DvD transfers across — Tighter security and control — Reduced privacy and anonymity
accredited investor status and nationality.102 Allow listing
platforms, executing only when both parties (must disclose information)
On-chain identities can range from fully — Simplified compliance checks
are KYC-verified.108 — High maintenance overhead
identifiable to pseudonymous and anonymous. — Clear accountability and audit trails
However, fully anonymous identities conflict On-chain identity enforcement often follows — Excludes unlisted (possibly
with Financial Action Task Force (FATF) allow- or deny-list models. Allow-lists enhance legitimate) users
guidelines, which require due diligence for security but limit inclusivity, while deny-lists are
every financial customer and prohibit more open but require constant monitoring to — More open and inclusive — Reactive approach (must
untraceable accounts.103 mitigate risks from malicious actors. Deny listing constantly update list)
— Less friction for onboarding
Privacy-enhancing technologies (PETs) such — Bad actors can create new
Achieving privacy on-chain is not without its — Default user privacy preserved
identities
as zero-knowledge proofs and fully hurdles and trade-offs. While unlikely, storing
homomorphic encryption protect sensitive personal data on-chain raises concerns about — Potential for false positives or
data while enabling compliance. For example, regulations such as the General Data censorship
PETs, including pseudonymization and zero- Protection Regulation (GDPR)’s “right to be
knowledge proofs, are being explored by the forgotten”.109 Because public networks have
BIS under Project Aurum 2.0 to advance mixer and tumbler decentralized applications
retail CBDCs.104 that can hide the trail of who sent and received
Impacts of tokenization Contents 41

5 Impacts of tokenization
Tokenization is catalysing changes across market structures
and the financial market value chain.
 Impacts of tokenization Contents 42

market practices and, instead, markets should automated rebalancing/yield strategies using
5.1 Evolving market evaluate the roles of incumbents alongside
5.2 Changes to tokenized platforms.
structures new entrants.
incumbents
Regulators are advancing the collective Issuers
Tokenization will change intermediary roles, not understanding of enhanced market structures Incumbent responsibilities will expand to offer
Issuers are traditionally tasked with capital
eliminate or displace them.111 Reducing through industry initiatives, including the new value propositions.114 For example, 21X
raising and corporate actions, issuers are now
intermediaries is often hailed as a value driver United Kingdom’s Digital Securities Sandbox launched a regulated exchange and settlement
making use of tokenization for on-chain capital
for tokenization; however, reducing or and the European Union (EU) Pilot Regime. system on Polygon after being licensed under
formation, automated corporate actions (e.g.
eliminating intermediaries is not always Project Guardian led by the Monetary the EU Pilot Regime’s exemptions from CSD
voting) and programmable asset terms, thus
beneficial, as incumbents provide valuable Authority of Singapore also serves as another Regulations and Markets in Financial
enhancing efficiency and transparency. Issuers
services to maintain safety and soundness. platform for the collaborative design of a Instruments Directive requirements, allowing
often incur underwriting, legal, exchange listing
For example, Phase 2 of the e-HKD pilot tokenized value chain. the integration of a conventional exchange and
and registration fees – all aimed to be
demonstrated that intermediaries could act as CSD into one smart contract for trading.115
While the asset life cycle will remain reduced by tokenization.
dynamic facilitators of liquidity and trust by
unchanged, tokenization reshapes interactions What will remain a constant is the preference
managing separate liquidity pools for instant
among incumbents and digital-native service for trusted intermediaries, particularly where Exchanges
retail CBDC-to-fiat conversion to bridge
providers to meet new demands for speed, centralized services, such as custody and
tokenized and traditional systems and ensure
efficiency and compliance. Incumbent regulatory compliance, are critical. Tokenization modernizes exchanges by
adoption where tokenized assets are not yet
responsibilities will likely evolve in parallel with enabling programmable trading restrictions via
widely accepted.112
the introduction of digital-native market digital identities (e.g. insider trading controls),
Buy/sell-side (asset managers, supporting tokenized listings (e.g. Deutsche
Market structures – including the buy/sell side structures and service providers, creating a
(e.g. wealth managers, asset managers), platform for product innovation.
wealth managers, brokers/dealers) Börse’s digital exchange) and merging
issuers (e.g. a public government issuing traditional and decentralized models (e.g.
The sell-side traditionally handles trade
securities or a corporation issuing bonds), AMMs), thereby enhancing compliance and
execution and client relationships with the buy-
exchanges, CCPs, CSDs, custodians and market accessibility.
side, while the buy-side manages portfolio
transfer agencies (TAs) – are evolving to adapt strategies and client relationships with end
to tokenization. investors. Tokenization expands their role to Central counterparties
include reusable digital identity verification,
Full disintermediation in regulated financial CCPs mitigate counterparty risk through
advising on token portfolios, underwriting
markets has been demonstrated collateral management and trade
assistance, automated ordering on digital
experimentally. For example, DekaBank intermediation. In tokenized markets, they
exchanges, on-chain settlements with on-
issued and sold a digital bearer bond without may evolve into governance-focused entities,
chain cash, self-custody wallets (e.g.
intermediaries.113 This should be viewed managing tokenized collateral and cross-chain
Robinhood’s Non-Custodial Wallet) and
cautiously as intermediaries thwart harmful risk via smart contracts.116
 Impacts of tokenization Contents 43

Liquidity centralization – particularly for Custodians Transfer agencies

tokenized cash and various stablecoins –
may become a core function. However, the Custodians can evolve into digital asset TAs manage shareholder registries, cap tables
scope of the CCP’s role should be assessed safekeepers, emphasizing multi-tiered and security transfers, often through manual,
contextually. For example, Australia’s Council custody, staking and institutional wallet fragmented processes.124 Most TAs use ledger
of Financial Regulators concluded that a CCP solutions, in addition to acting as a trusted software to manage investor data, but these
delivers net benefit only when participation intermediary for on- and off-chain integration. systems rely on manual entry, adjustments
reaches critical mass to offset its cost For example, BNY has expanded its Digital and data sharing with fund administrators,
structure (e.g. margins, fees).117 Asset Platform to include on-chain data alternative trading systems, custodians
services, beginning with broadcasting fund and brokers.125 Tokenization could improve
accounting data for BlackRock’s tokenized their roles by using reusable digital IDs for
Central securities depositories fund onto the Ethereum network. This example efficient KYC/AML, automating cap table
CSDs manage post-trade functions such reflects how major institutions are adapting services, using programmable ledger
as record-keeping and corporate actions. to the commercialization of tokenized products bookkeeping, conducting direct on-chain
Complexity and manual processes persist – and leveraging data transparency, automation transfers and programmatically orchestrating
78% of leading financial institutions still and accessibility across the asset life cycle corporate actions, demonstrated by
process actions manually.118 CSDs could while also optimizing the user experience WisdomTree’s tokenized funds and Securrency
issue assets using verified digital IDs, manage for the on-chain native investor.122 Transfers’ integration.126
settlement with on-chain cash, validate ledgers Further, the expected increase in collateral TAs can also benefit from more efficient
and automate asset servicing.119 CSDs will velocity will designate custodians as key KYC checks and repurposable digital IDs,
also provide regulatory compliance, while participants in cross-custodial asset as financial institutions spend an average
supporting asset tokenization, wallet movements, thus increasing their speed $2,598 per client onboarded, and TAs often
management and interoperability between of operation while remaining KYC/AML- verify thousands of investors across dozens
tokenized and traditional systems.120 In the compliant. Digital-native custodians are of countries.127 For example, as momentum
Regulated Settlement Network trials, CSDs acquiring trust charters to facilitate payments, around tokenized funds builds, the TAs’ role
were also identified as potential immobilization access liquidity and bridge traditional and could evolve towards a digital transfer agent
providers for multi-asset DvP settlements.121 crypto-assets.123 In the case of physical (DTA) model. In this approach, smart
assets, analogue providers such as gold contracts can be used to maintain share
vault services will become integral to registries and automate fund life-cycle
processes like redemption. activities – such as subscriptions and
redemptions – unlocking greater operational
efficiency, transparency and interoperability
across blockchain networks.
 Impacts of tokenization Contents 44

FIGURE 16

Market catalysts driving new custodial capabilities

Market catalysts New capabilities

Custodians will be viewed as the — Staking rewards management

Trusted custody
trusted safekeepers of digital Institutional
of native digital — Tokenized collateral management
assets, unlocking new products productization
assets
and services — Institutional wallet/vault services

— Cold and hot storage

Increased More assets can be brought on- Multitiered
chain and used (and reused) as — Institutional “vaults”
collateral mobility custody and on-
collateral, domestically and cross- — Retail and segregated wallets
and velocity border chain functions
— On-chain corporate actions

— Reusable credentials
Pronounced Notable uptick in adoption of public Next-gen On-chain — Privacy-enhancing tech
public network blockchains by financial services custodianship identities
adoption entities and KYC/AML — Off-chain ID data storage
— GDPR compliance

Network
Unlocked private New sources of market activity for integration and — Cross-chain integration
private assets in primary and
market liquidity on-chain — On-chain activity tracking CASE STUDY 8
secondary markets
analytics
Integration
— Cryptographic agility
Quantum attacks Risks of network interception, Quantum-safe — Quantum-resistant signature
to break identity impersonation and “harvest algorithms
now, decrypt later” systems
encryptions
— Novel encryption methods Click to open
case study details
 Impacts of tokenization Contents 45

TA B L E 5
No major changes anticipated
Potential changes to incumbent responsibilities through tokenization
ENTITY ONBOARDING ISSUANCE TRADING CLEARING/SETTLEMENT CUSTODY ASSET SERVICING

Buy/sell side — On-chain ID verification via — Tokenized Assets Advisory — Automated, direct ordering via — On-chain cash tokens for — Self-custody brokerage wallets — Automated rebalancing and
repurposable digital identities — Underwriting and syndication new digital asset exchanges settlement (e.g. deposit tokens) (e.g. Robinhood wallet) yield strategies
(e.g. JPM Project Epic) (e.g. UBS Native Digital Bond — Peer-to-peer trading on
on SDX) secondary markets (e.g. DEXs)

Issuer — Smart contract design (e.g. — Smart contract deployment — On-chain corporate actions
(public/private asset terms) (e.g. voting)
— On-chain capital raises
sector)
Exchanges — Re-purposable digital identities — Tokenized asset listings (e.g. — Hybrid: Traditional orderbooks
to enforce trading restrictions Deutsche Börse Digital and on-chain transactions (e.g.
(e.g. insider trading) Exchange) automated market makers)

CCPs — Multilateral governance (e.g.

Eurex DLT Trials)
— Tokenized margin collateral
management
— Default management and
liquidation using on-chain cash
CSDs
— On-chain ID verification (e.g. — Tokenized and digitally native — On-chain cash for settlement — Automated ownership records — Automated, programmatic
SDX's adoption of Digital Token issuance replacing book-entry — Node operations and network — Updates via distributed ledger corporate actions (e.g.
Identifier) issuance validation Chainlink, Euroclear, Swift)
— Cross-chain interoperability

Custodians — Digital asset safekeeping — Automated dividend

distributions
— Digital asset staking
— Staking rewards distribution
— Private key management
— Tokenized lending/borrowing
— Institutional wallets/vaults
(e.g. BTC-backed loans)
Transfer — On-chain ID verification via — Programmable shareholder — Automated cap table services — Automated bookkeeping via
agencies repurposable digital identities registry updates distributed ledger
— Direct on-chain asset transfers
 Impacts of tokenization Contents 46

At least three new digital-native market employ these services in their delivery of
5.3 New market roles structures are conceivable: tokenized products.
5.4 New products
New intermediaries will also support the asset — Token asset issuers and developers At least five new digital-native service Evolving market structures and the rise of
life cycle, potentially with more participants will create and structure tokenized assets, providers are conceivable: digital-native service providers could enable
than conventional setups.128 This research ensuring regulatory compliance and the creation of innovative financial products
— On-chain identity providers could
found that there may be two new classes embedding programmability to unlock by facilitating creativity, largely fuelled by
streamline identity verification, but trust in
of entities to support the capabilities needed new market efficiencies. These entities composability and programmability. These
third-party issuers remains uncertain, so
to deliver tokenization at scale: new market will also develop, upgrade and maintain advances can unlock new liquidity models,
institutions may prefer proprietary KYC
structures and digital-native service providers. the underlying tokenization platform or DLT risk-free uncollateralized lending and more
processes and certificate authorities are
Combined, these two groups plus incumbents and build digital workflows for pre-issuance efficient capital markets, reshaping traditional
more likely than custodians to become
would then drive product development forward activities, automating various workflows finance with programmable, automated and
trusted issuers while liability in transferring
using tokenization’s features. between parties until deal-closing.130 highly composable financial primitives. For
verified identities remains unresolved.
example, as the Bank of Canada explored,
— Digital asset custodians will specialize
— Interoperability providers could provide flash loans native to blockchain ecosystems
New market structures in secure cryptographic key storage and
interoperability services between illustrate how uncollateralized lending with zero
management, enabling institutional-grade
New market structures are expected to play programmable ledgers and conventional default risk transforms liquidity access for
custody and access control for tokenized
critical roles across the asset life-cycle steps. systems (e.g. ACH, Swift) for settlement. sophisticated market participants.131
assets. In many cases, incumbents will use
Token Issuers could provide asset issuance
digital asset custodians should they decide — Node operators could provide resources
services on-chain, including developing and Additionally, new mechanisms, such as using
not to build their own capabilities. to verify transactions, produce blocks,
deploying token contracts. Once the tokenized crypto-assets for collateral and smart funding
asset is available, a digital asset exchange facilitate consensus and update the ledger
— Digital asset exchanges will facilitate – where assets are aggregated and liquidated
could offer compatible trading services, driving or chain.
the trading and liquidity of tokenized based on payment needs, such as converting
liquidity and market depth. Digital securities assets, bridging traditional finance with — Key management providers could offer ETH to fiat-backed stablecoins in real time to
depositories (DSDs) could be introduced as programmable ledger-based assets. specialized custodial services to safekeep facilitate payments – can further accelerate
a native service provider on DLT networks tokenized assets and help financial firms product development.132
to perform one or more of the actions typically meet compliance measures, including
Digital-native service providers
provided by CSDs, including settlement and BitGo and Metaco (acquired by Ripple).
management of securities.129 Digital-native service providers will provide
solutions for the secure issuance, trading and — Smart contract auditors could provide
custody of digital assets. The adoption of auditing and monitoring of smart contracts
these services by financial institutions will to ensure the verifiability and safety of the
require licensing and will vary by region. Often, deployed contract.
incumbents or new market structures will
Design choices Contents 47

6 Design choices
Choices must be made on tokenization’s
infrastructure, settlement assets and operating hours.
 Design choices Contents 48

TA B L E 6
6.1 Infrastructure
Key programmable ledger models
When different financial institutions adopt
tokenization, they need to decide upon the CATEGORY PUBLIC-PERMISSIONLESS PUBLIC-PERMISSIONED PRIVATE-PERMISSIONED
underlying infrastructure. Three models of
programmable ledgers are presented, two Description — Open, decentralized networks where — Networks open to selected, vetted — Fully controlled and centralized networks
anyone can join, transact and validate participants, typically regulated entities with restricted access to pre-approved
permissioned and one permissionless, with transactions without prior approval participants
— Blend decentralization with controlled
varying benefits.
— Ideal for broad participation and innovation governance, providing viewability, high — Optimized for high performance,
but with variable performance and limited performance and regulatory alignment confidentiality, regulatory compliance and
default privacy internal institutional use cases
Permissioned ledgers
Transaction Restricted access: Participants vetted and Closed and selective entry: Typically,
Financial markets have historically used Open access: No entry barriers and any user
permissions approved by trusted authorities can submit enterprises and known counterparties can
with internet access can submit transactions
private- and public-permissioned transactions submit transactions
programmable ledgers because of the native
functions of control and oversight, which can Data Fully transparent by default: Privacy Controlled transparency: Targeted privacy Strict confidentiality: Default confidentiality
viewability achievable through additional tools measures feasible (e.g. selective disclosure)
mitigate AML, KYC, legal and fraud risks and with complete control over data exposure
(e.g. ZK proofs)
enable dispute resolution. This environment
allows for efficient data sharing and secure Governance Highly decentralized: Consensus among Moderately centralized: Governance through Highly centralized: Even narrower onboarding
record-keeping, bolstering trust, as only model independent nodes (e.g. proof-of-stake) permissioned entities who validate the network of permissioned entities to validate the network
approved entities can read or write
transactions. At the same time, in a Scalability and
Varies significantly: Dependent on consensus
High throughput: Optimized for regulatory High throughput: Purpose-built for enterprise-
permissioned setup, broader participation is algorithms (e.g. proof-of-work is not natively level volume and with predictable performance
performance compliance and institutional transactions
scalable, while proof-of-stake is scalable)
possible but still governed by strict rules of
entry. For example, JP Morgan’s Kinexys
Compliance Strong compliance: Designed for regulated Highest compliance: Explicitly designed for
platform has processed more than $1.5 trillion Minimal by default: Compliance possible but
and regulatory activities and integration with legacy internal regulatory adherence, auditability and
requires additional processes or layers
in notional value since its inception in 2021 by alignment infrastructure granular control
offering DLT-based payments, intraday repo
High liquidity: Driven by network effects, Moderate liquidity: Dependent on size and Variable liquidity: Access tightly controlled but
and collateral services.133 Another example is Liquidity and
market access global participation and interoperability; suitable influence of the managing consortium, targeted can be engineered for high internal liquidity
Citi’s Integrated Digital Assets Platform for broadly traded assets and digital currencies towards institutional-grade asset pools within members, suitable for discrete trading
(CIDAP), which offers an array of use cases
across tokenized deposits, trade processing, Low barrier to entry: Moderate–high Moderate barrier to entry: Stable, High barrier to entry: Lowest marginal
Infrastructure
bond exchange and private fund operational and transaction costs based on predictable operational costs aligned with transaction costs; ideal for large, structured
requirements
network fees enterprise standards transactions
tokenization.134
 Design choices Contents 49

The main challenges associated with and Solana host more than 24,000 active Notable institutional deployments include: fees further delay settlements and can
permissioned ledgers are scalability and developers, accelerating innovation and undermine liquidity.147
adoption, although they are likely to succeed tool development.137 — Franklin Templeton expanded its tokenized
when financial institutions with strong network US Government Money Fund (FOBXX) to Permissionless networks also face the
effects operate the platform. However, the
3. Network effects Avalanche, marking the first US-registered privacy–transparency conundrum – balancing
Public ledgers promote broader mutual fund using a public ledger for open data access with confidentiality.148
permissioned or private construct can hinder
participation and distribution, reducing recordkeeping and transactions.143 Lacking built-in identity verification, they
adoption for smaller players.
single points of failure and aligning with require external solutions to meet KYC/AML
user-centric financial models.138 — BlackRock launched its BUIDL fund across requirements, often involving off-chain data
Permissionless ledgers Ethereum and six other public networks: storage and compliance processes.
4. Transparency and real-time settlement Aptos, Arbitrum, Avalanche, Optimism,
Financial institutions have historically Open ledgers allow for continuous asset Polygon and Solana.144 Lastly, while programmable ledgers
approached permissionless networks with verification, streamlining operations and enable distributed governance, financial
caution due to regulatory and operational reducing intermediary reliance. These on-chain products operate without institutions must ensure that these systems
concerns. Nevertheless, a clear trend towards central clearing parties, signalling a structural align with their mandate to establish clear
exploration and adoption is emerging. 5. Enhanced transaction performance shift in market infrastructure. lines of responsibility and business
Innovations such as Ethereum’s Proto-
Permissionless networks – open systems Environmental concerns have diminished. continuity, such as reversals and
Danksharding (EIP-4844) and Solana’s
where anyone can join, access data and The shift from energy-intensive proof-of-work maintenance upgrades.149
speed enhancements have improved
validate transactions – are increasingly being transaction throughput and costs.139 (PoW) to efficient proof-of-stake (PoS)
tested and integrated into institutional consensus mechanisms – now the dominant
strategies.135 At their core, permissioned and As of May 2025, financial services entities model for public-permissionless – has made
permissionless systems differ in governance are actively using at least 30 permissionless programmable ledgers far more sustainable
and access. programmable ledgers.140 Their adoption is and scalable than in prior cycles.145 The
expected to grow as various market forces longstanding concern of network scalability
There are five distinct drivers for the drive further use of programmable ledgers. has been put to rest.146
exploration of permissionless networks: Public networks such as Ethereum now
average 1–1.5 million daily transactions.141 However, there can be challenges associated
1. Economic efficiency with permissionless ledgers. From a financial
Deploying and operating Layer-1s is Deutsche Bank is planning a permissioned stability perspective, the transparency of
increasingly cost-effective. Avalanche’s ZK-proof Layer-2 on Ethereum to meet permissionless programmable ledgers can
9000 upgrade, for instance, cut Layer-1 compliance requirements, demonstrating amplify liquidity risks for banks by enabling
deployment costs by 99%.136 that compliance on permissionless networks visible transaction flows that may trigger
does not require platform-wide gatekeeping withdrawals during stress events. Network
2. Developer ecosystems
functionalities and this can be enabled at the congestion, low throughput and variable
Open-source networks such as Ethereum
application or asset level.142
 Design choices Contents 50

term solution for this “in months, not years”,

6.2 Settlement assets indicating an acknowledgement of the
6.3 Operating hours
importance of delivering settlement in central
Without reliable on-chain settlement assets, bank money natively for on-chain An “always-on” infrastructure is a design
using tokenized assets at scale will be transactions.155 choice dependent on market demand, risk
challenging.150 According to a 2024 survey, tolerance and technology. Not all markets
79% of respondents indicated regulatory In addition to central bank money, several should or could operate on a true 24/7 basis.
clarity as the critical dependency for on-chain forms of on-chain cash could be used, For example, the New York Stock Exchange
cash.151 The lack of riskless settlement assets including fiat-backed stablecoins, reserves- (NYSE) received approval by its regulator to
is a roadblock when considering the BIS backed digital currency (RBDC) or deposit expand its operating hours from 16 to 22
Committee on Payment and Settlement tokens. For example, to enhance its platform, hours, citing a need for a two-hour break for
Systems (CPSS)–International Organization of Broadridge successfully integrated with system maintenance, central clearing and
Securities Commissions (IOSCO) Principles for Fnality’s Payment System (FnPS) – an RBDC asset servicing functions (coupon payments,
Financial Market Infrastructures, which state platform – paving the way for real-time DvP of etc.).157 Expansion of operating hours is a
that an FMI should conduct its money intraday repos with digitally represented funds technical matter, but also a people, business
settlements in central bank money where held at central banks.156 By making cash and policy choice that will be dependent on
practical and available.152 The existence of accessible and trustworthy, financial markets time zones, trade matching, liquidity
assets and on-chain cash is instrumental to can accelerate the responsible adoption of management and other functions that enable
achieving operational efficiency concerning tokenized assets. safe trading. Tokenization does offer
ancillary functions, including coupon functionality to operate 24/7, as demonstrated
payments, dividends and interest.153 by the always-on feature of DeFi; however,

79%
Institutions and customers risk delays, higher regulated markets operate in a more rigid
costs and compliance uncertainties without operational construct and will vary on a case-
on-chain cash. by-case basis.

While wCBDCs have undergone lengthy say regulatory clarity is the key
development cycles that have slowed dependency for on-chain cash to scale
adoption, a recent OMFIF survey
demonstrated that 59% of market participants
prefer wCBDC as the settlement asset for DLT-
based debt issuances.154 Responding to
market calls from financial institutions for
central bank money for DLT-based settlement,
59%
prefer wCBDC
the ECB shared its goal of enabling a short- for DLT-based debt-issuances
Considerations Contents 51

7 Considerations
Important considerations include combatting emerging cyberthreats,
ensuring financial stability and monitoring regulatory developments.
 Considerations Contents 52

when other defences fail. Addressing

7.1 Cybersecurity traditional vulnerabilities and novel
cryptographic threats is essential to protect
Cybersecurity is paramount in safeguarding users and institutions.
digital assets, as many crypto-related
breaches still arise from conventional threats Quantum computers represents a key threat to
rather than lost or compromised private keys. financial systems, and the risk increases with
Recent high-profile incidents demonstrate that tokenized assets as quantum computing can
phishing, malware and insider attacks remain render widely used encryption methods
the most prevalent risks. insecure. Many programmable ledgers are
prioritizing quantum-resistance on their
For example, in 2025 the Dubai-based crypto- roadmaps; however, a trade-off is introduced
exchange Bybit was hacked, leading to a loss with the efficiency of encryptions versus their
of nearly $1.5 billion in ETH – it is regarded as quantum resistance. There are three types of
the largest crypto-asset theft to date.158 This quantum attacks: network interception,
attack showed that even industry-accepted identity impersonation and “harvest now,
security measures such as multi-signature decrypt later”.159 Design choices can thwart
wallets and cold storage are susceptible when this risk, such as cross-chain protocol security,
linked to operational processes and third-party secure token transfer mechanisms and
services. While specific to crypto-assets, this cryptographic agility.160
highlights that regulated digital assets using
the same technology must thwart
cybersecurity risks by harmonizing
cybersecurity measures in congruence with
traditional financial markets.

Although institutional private key security has

improved through advanced methods such as
multi-party computation (MPC) and hardware
security modules (HSM), robust threat
modelling and protection strategies remain
vital. Effective private key management
practices, including secure storage and strict
access controls, can mitigate fallout even
 Considerations Contents 53

7.2 Financial stability The FSB highlights several strategies to encourage safe adoption:
7.3 Regulatory
Due to its limited scale, tokenization
EXPLORING NATIVELY ISSUED TOKENS developments
currently poses a minimal risk to financial Explore using natively issued tokenized assets compared to reference asset
models to minimize challenges associated with liquidity and maturity mismatch, A major barrier to large-scale tokenization
stability. However, as adoption grows, the
driven by managing dual liquidity pools (token and underlying asset). Firms should remains the lack of regulatory clarity in digital
Financial Stability Board (FSB) warns of
embrace cash on-chain to mitigate maturity mismatch and ensure standard
vulnerabilities, including liquidity and maturity asset markets. However, recent political and
settlement windows.
mismatches, leveraged rehypothecation, price regulatory shifts suggest growing momentum
and quality obscurity from smart contract towards a more defined framework.
composability, systemic concentration risks MITIGATING CONCENTRATION AND CONTAGION RISKS Institutional digital asset projects have often
and operational fragilities stemming from multi- Promote competition by making markets accessible to smaller players and carefully stalled due to uncertainty regarding the
party collaboration.161 distributing market powers, balance sheets and liquidity. permissibility of on-chain products.162

One of the first regulatory frameworks that

clarified the role of tokens and tokenization
CONTROLLING THE LIMITLESS NATURE OF COMPOSABILITY was in Luxembourg. Blockchain Law I (2019)
Use composability in a manner congruent with safety and soundness and embed recognized DLT as a valid system for securities
controls to prevent the limitless creation of wrapped assets per the asset’s risk registration and enforceable book transfers.
profile and the risk tolerance of relevant parties, such as with the application in
Blockchain Law II (2021) permitted DLT-based
increasing the velocity of collateral through reuse across multiple trading steps.
securities issuance accounts. Blockchain
Law III (2023) confirmed that DLT-held
securities qualify as financial assets under
EMBEDDING SMART CONTRACT AUDIT PROCEDURES
collateral regulations, aligning with the EU’s
Apply rigorous testing procedures associated with smart contract development
DLT Pilot Regime.
using open-source frameworks and testing tools to minimize risks associated
with asset composability. Liechtenstein enacted the Token and Trusted
Technology Service Provider Act (TVTG) in
2020. This legislation provides a
GOVERNING MULTISTAKEHOLDER PROCESSES comprehensive and technology-neutral
Coordinate rules and governance frameworks across all participating parties while approach to regulating the token economy,
relying on a neutral third party to mediate disputes or challenges. addressing civil and supervisory aspects. By
defining tokens as containers of rights, the
TVTG enhances regulatory clarity.163
 Considerations Contents 54

FIGURE 17 The newly elected US administration has

signalled a pro-digital assets stance, which
Policy and digital asset regulatory developments (2019–2024)
indicates progress towards integrating digital
assets into traditional finance.164 Hong Kong is
advancing bond market tokenization, with the
SFC and HKMA forming a task force to
2019 2020 2021 2022 2023 2024 develop a roadmap for bond and FX market
infrastructure, including tokenized issuance
Blockchain Law I: Swiss law amended to FINMA guidance on UAE VARA established EU DLT Pilot Regime MAS updates Payment and trading – marking a key step towards
Recognized DLT-based accommodate DLT blockchain and in Dubai (European Union) Services Act for digital institutional adoption of digital assets.165 Lastly,
securities transfers (Switzerland) financial services (United Arab Emirates) assets
(Luxembourg) (Switzerland) (Singapore)
in the UK, the Financial Conduct Authority has
UK’s Financial Services recently pledged to support fund tokenization
British Virgin Islands’ and Markets Act 2023
Cayman Islands
(United Kingdom)
as part of its 2025–2030 goals.166
Token and Trusted Monetary Authority Blockchain Law II: Virtual Assets Service
Technology Service guidance Enabled DLT-based Providers Act
Provider Act (TVTG) (Cayman Islands) issuance accounts (British Virgin Islands)
Dubai’s VARA issues
(Liechtenstein) (Luxembourg) comprehensive VASP
framework
(United Arab Emirates)
Cayman Islands' Virtual
Asset (Service
Providers) Act
EU Markets in Crypto-
(Cayman Islands)
Assets (MiCA)
regulation
(European Union)

Blockchain Law III: DLT

securities as financial
instruments
(Luxembourg)

Source: World Economic Forum

 Conclusion Contents 55

financial operations – including risk frameworks and reference data models.

Conclusion management, clearing and corporate actions –
require controlled execution windows to
However, complex financial processes –
such as corporate actions – may require
Tokenization can benefit maintain stability and mitigate volatility. a phased approach to standardization
Technological innovation alone does not to adapt to jurisdictional differences and
financial markets by eliminate the operational and regulatory evolving industry practices.
establishing transparency, realities that underpin market integrity. There
For tokenized markets to function effectively,
allowing greater ownership needs to be a balance between incumbent
liquidity providers and market makers should
control, promoting operational institutions and new industry players from a
be encouraged to participate. Without
regulatory and market power perspective.
efficiency, granting greater Ensuring fair market access, open sufficient secondary market depth, tokenized
accessibility to investors and interoperability and balanced regulatory assets risk remaining illiquid, limiting their utility
enabling multi-asset operations. despite technical advances. Policy-makers
influence is critical to preventing any undue
and financial institutions should explore
concentration of power while inspiring
mechanisms to encourage market-making
The differentiators of this technology sustainable growth.
activities, such as tailored liquidity
application can help to realize cost and time
Lack of global standards and regulatory programmes, capital treatment incentives and
savings for financial markets and broaden
fragmentation for tokenization remain a leading expanding regulatory sandboxes that spur
access to investors in capital markets.
challenge and policy-makers should update institutional participation.
However, achieving these benefits will not
financial regulations based on the principle
come without deep public–private Several stakeholders should make strides to
of technology neutrality to accommodate
collaboration on consistent regulations and facilitate the use of tokenization including
tokenized assets while ensuring enforceability,
standards, adaptation of market structures policy-makers, technology providers and
investor protection and risk management.
and value chains, enhanced collateral financial institutions.
The lack of legal clarity around on-chain
frameworks and safe and sound usage
ownership rights and settlement finality can By addressing regulatory uncertainty, adapting
of open networks.
stifle the value proposition of tokenization as market structures and encouraging
Market structures need to evolve to harness observed in potential discrepancies associated competitive, liquid markets, tokenization can
tokenization’s advantages. Today’s financial with a shared system of record and unified enable an improved global financial
infrastructure is based on centralized consensus on the state of an asset. infrastructure. Achieving this vision requires a
intermediaries and predefined settlement balanced, pragmatic approach that spurs
By implementing new technologies in the
cycles, whereas tokenized markets introduce innovation while upholding market integrity,
market infrastructure, it is necessary to ensure
programmability, atomic settlement and the competition and operational resilience.
interoperability, particularly in defining common
potential for “always-on” markets. However,
transaction protocols, asset classification
despite technological advances, certain
 Contributors Contents 56

Contributors Acknowledgements Working Group

Mustafa Mert Așkaroğlu
Richard Fenner
Director, Government Relations, Euroclear

Steering Committee Advisor, Bank for International Settlements Conan French

Innovation Hub, Hong Kong Director, Digital Finance, Institute of International
Lead Authors Marta Belcher Finance
Chairperson; President, Filecoin Foundation Mark Attard
Cameron Nili Director, Digital Assets & Client Engagement – Jon Frost
Executive Fellow, World Economic Forum; Duane Block TTS, Citi Head of Innovation and the Digital Economy,
Digital Assets Strategy Director, Accenture Managing Director, Accenture Bank for International Settlements (BIS)
Daniela Barbosa
Sandra Waliczek Dante Disparte Executive Director, LF Decentralized Trust Tom Duff Gordon
Lead, Blockchain and Digital Assets, World Chief Strategy Officer; Head, Global Policy, Circle Vice-President International Policy, Coinbase
Economic Forum Internet Financial Nuntapun Bhensook
Assistant Director, Digital Currency Policy and Aaron Gwak
Denelle Dixon Development Unit, Bank of Thailand Founder and Chief Executive Officer, Libeara
Project Leadership Chief Executive Officer and Executive Director,
Stellar Development Foundation Darko Hajdukovic
Amy Caruso
Head of Collateral Initiatives, ISDA Head of Digital Markets Infrastructure, LSEG
Duane Block
Sandy Kaul
Managing Director, Accenture Joann Healy
Head of Digital Asset & Investor Advisory Services, Bugra Celik
Franklin Templeton Investments Director, Digital Assets and Currencies, HSBC Director, Capital Markets Marketing, Chainlink
John Lee
Labs
Managing Director, Accenture
German Soto Sanchez Boon-Hiong Chan
Chief Strategy Officer, Broadridge Financial Industry Applied Innovation Lead, Head Securities Matthew Higgins
Drew Propson
Solutions Market & Technology Advocacy, Deutsche Bank Assistant Director – Solution Adoption, ISDA
Head, Technology and Innovation in Financial
Services, World Economic Forum John Ho
Anthony Scaramucci Hugo Coelho
Founder, SkyBridge Capital Head of Digital Policy, Centre for Alternative Head of Legal, Financial Markets, Standard
Finance, University of Cambridge Chartered Bank
Faryar Shirzad
Chief Policy Officer, Coinbase Daniel Coheur Markus Infanger
Co-Founder and Chief Commercial Officer, Tokeny Senior Vice-President, Ripple
“Topp” Jirayut Srupsrisopa
Group Chief Executive Officer, Bitkub Capital Ezechiel Copic Candace Kelly
Group Holdings Director of Digital Asset Policy, Visa Chief Legal Officer, Stellar Development
Foundation
Tom Zschach Matthew Danzig
Chief Innovation Officer, Swift Managing Director, Technology Investment Nick Kerigan
Banking, Lazard Group Head of Innovation, Swift
 Contributors Contents 57

Kathryn Krumpholz Prakash Neelakantan Nicole Semenov Heng Wang

Managing Director, Accenture Vice-President – Blockchain Strategy, Broadridge Senior Analyst, Accenture Professor of Law and Associate Dean (Faculty
Financial Solutions Matters & Research), Yong Pung How School of
Morgan Krupetsky Dinesh Shah Law, Singapore Management University
Head of Institutions & Capital Markets, Ava Labs Kamila Nigmatulina Director, Fintech Research, Bank of Canada
Research Fellow, University of Oxford Joy Wann
Marion Laboure David Shone Vice-President, Regulatory Affairs Advocacy at
Managing Director – Macro Strategist, Deutsche Bénédicte Nolens Senior Director, Data & Digital Solutions, ISDA Mastercard, Mastercard International
Bank Head, BIS Innovation Hub Hong Kong Center,
Bank of International Settlements Aditya Kumar Sinha Clinton Wilhight
Ashley Lannquist Head – Fintech & Digital Innovation, Financial Consultant, Accenture
Digital Finance Expert, Digital Advisory Unit, Karen L. Ottoni Services Sector, Qatar Financial Centre Authority
International Monetary Fund (IMF) Senior Director, Ecosystem, LF Decentralized Trust Srikant Yennamandra
Lukasz Szpruch Managing Director, Accenture
Xavier Lavayssière Christine Parlour Director, The Alan Turing Institute
Digital Finance Expert, International Monetary Fund Professor and Chair, Finance and Accounting, Bryan Zheng Zhang
Haas School of Business, University of California, Pallavi Thakur Executive Director and Co-Founder, Cambridge
Michael Law Berkeley Director, CBDC and Interoperability, Swift Centre for Alternative Finance, Cambridge Judge
Senior Fintech Director, Hong Kong Monetary Business School, University of Cambridge
Authority Jack Pouderoyen Wee Kee Toh
Strategy and Innovation, Swift Zhijun William Zhang
Global Head of Business Architecture for Onyx
Kelvin Lee Adviser, Bank for International Settlements (BIS)
Coin Systems, JP Morgan
Co-Founder and Chief Executive Officer, Alta Stratos Pourzitakis
Alternative Investments Head of Digital Policy Asia Pacific, HSBC Group Matt Zimmermann
Michael Treagus
Public Affairs General Counsel, Filecoin Foundation
Senior Analyst, Accenture
Stephanie Lheureux
Head of Digital Asset Excellence Centre, Euroclear Archie Giridhar Ravishankar Xiaonan Zou
Christiaan Van der Weerd
Co-Founder and Chief Executive Officer, Cogni Executive Director, Center of Expertise; Lead,
Gordon Liao Senior Governmental Affairs Advisor, UBS
Digital Currency; Head, Digital Asset Treasury, UBS
Chief Economist; Head, Research, Circle Internet Jessica Renier
Financial Managing Director, Digital Finance, Institute of Matthew Van Niekerk
International Finance Founder and Chief Executive Officer, SettleMint NV
Katie Mitchell Production
International Policy, Coinbase Nilmini Rubin Adhish Vyas
Chief Policy Officer, Hedera Hashgraph Senior Director, Product Management, Blockchain, Bianca Gay-Fulconis
Katey Neate Crypto and Digital Currencies, PayPal Designer, 1-Pact Edition
Managing Director, Global Head of Investor Rajeev Sambyal
Alice Wang Tanya Korniichuk
Solutions, BNY Head of Digital Cash, BNY Designer, 1-Pact Edition
Managing Director, Strategic Growth Office and
Nischint Sanghavi International Consumer Wealth, JP Morgan Alison Moore
Head of Digital Currencies – AP, VISA Editor, Astra Content
 Endnotes Contents 58

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