Imagine owning a fraction of a skyscraper, a piece of fine art, or even a stake in a renewable energy project — all with just a few taps on your phone. That’s the promise of tokenisation, a financial innovation poised to reshape global markets. For an in-depth industry view, see MidSquare’s article on how tokenisation is transforming financial services.
1. What Is Tokenisation?
At its core, tokenisation is the process of converting ownership rights to an asset into a digital token stored on a blockchain or other distributed ledger technology (DLT) platform (BIS, 2023; McKinsey, 2024).
These tokens can represent:
- Physical assets like real estate, gold, or art.
- Financial instruments like bonds, equities, or fund shares.
- Intangible rights like intellectual property or carbon credits.
This is different from data tokenisation in cybersecurity, which replaces sensitive data (like credit card numbers) with non-sensitive tokens (Wikipedia, 2025).
2. How Tokenisation Works
- Asset Selection – Identify the asset to be tokenised.
- Legal Structuring – Ensure the token legally represents ownership or rights.
- Token Creation – Deploy a smart contract on a blockchain to issue tokens (Baker McKenzie, 2025).
- Trading & Settlement – Tokens can be bought, sold, or transferred peer-to-peer, often with near-instant settlement.
The process is powered by smart contracts, self-executing code that automates compliance checks, dividend payments, and other conditions (Wyoming Legislature, 2019).
3. Key Benefits of Tokenisation
- Fractional Ownership – High-value assets can be divided into affordable shares, making them accessible to more investors (OMFIF, 2024).
- Increased Liquidity – Assets that were traditionally illiquid (e.g., property, fine art) can be traded on secondary markets.
- Faster Settlement – Blockchain-based transactions can settle in minutes instead of days (PwC, 2023).
- Greater Transparency – Blockchain ledgers are immutable, enabling clear audit trails and reducing fraud risk (BIS, 2023).
4. Real-World Examples & Adoption
- BlackRock launched a tokenised money market fund, reaching $2.9 billion in assets in 2025 (CoinDesk, 2025).
- JPMorgan executed a tokenised bond trade on a public blockchain in early 2025 (Reuters, 2025).
- The Swiss National Bank piloted tokenised central bank money for bond settlement (Reuters, 2024).
5. Challenges & Risks
- Regulatory Uncertainty – Laws differ globally, and compliance frameworks are still evolving (Baker McKenzie, 2025).
- Technology Integration – Interoperability between platforms and legacy systems is complex (FSB, 2024).
- Market Trust – Many investors remain cautious due to volatility and security concerns (FT, 2024).
6. The Road Ahead
Analysts estimate the tokenised asset market could reach $2–4 trillion by 2030, with some predictions as high as $30 trillion (Wikipedia, 2025). Emerging trends include:
- Integration with CBDCs for smoother settlements.
- Regulatory sandboxes to test compliant tokenised markets.
- Global interoperability standards to unify token networks.
Conclusion
Tokenisation is not just a buzzword — it’s a structural shift in how we define, trade, and invest in assets. From making elite investments accessible to boosting efficiency across markets, it holds the potential to democratise finance.
For a deeper dive into the financial industry’s perspective, read MidSquare’s insight on how tokenisation is transforming financial services.