Valuable assets are traditionally hard to trade quickly. The result is trapped capital, higher risk and a costly mismatch between investors wanting to move money and the market being able to process transactions. Tokenisation is reframing how value moves, helping to redefine a new era of liquidity.
At its core, tokenisation is a liquidity story. When ownership rights are represented as digital tokens on shared infrastructure, assets can be fractionalised, transferred 24/7 and governed by code that executes consistently. In practice, that means fewer reconciliation loops, lower frictions and new routes for both issuers and investors to meet in the middle. The vision aligns with central-bank thinking of a unified ledger where tokenised claims and money are interoperable.
Tokenised assets are growing in popularity. According to Coindesk, the Real-World Asset (RWA) tokenisation market has grown almost fivefold in just three years. The market has already reached $24 billion in size, benefitting from increased institutional adoption, and projections from Standard Chartered predict that demand for all tokenised assets could top $30 trillion by 2034.
Tokens as new routes to liquidity
Illiquid assets have long carried frictions that slow exits and deter new investment. Tokenisation chips away at those frictions, splitting ownership into smaller, tradeable units and embedding transfer rules directly into the asset itself.
The real estate market is experiencing a notable shift, for example, and some developers and sellers now accept cryptocurrency alongside traditional payment methods. In the past, high-value property transactions were slow, complex and costly, often locking up capital for years. This is due to the complexity of payment chains and the way money is stored across various assets along the chain.
Tokenisation changes this, enabling faster, more streamlined transactions similar to the crypto payments already reshaping the real estate market, where tokenisation of real estate assets is expected to reach at least $4 trillion by 2035 globally.
Regulation that protects innovation
The European Union has moved early to give tokenised finance guardrails. MiCA now provides a unified framework for the issuance and intermediation of crypto assets, with stablecoin provisions in force since 30 June 2024. This helps to provide fewer grey areas on disclosures, governance and prudential expectations.
DORA, applicable from 17 January 2025, complements MiCA by setting operational-resilience baselines. These include incident reporting, testing and third-party risk management across the financial sector, including tokenisation stacks. In plain terms, if assets are going to move on new rails, those rails must withstand cyber stress and systemic shocks.
Other regions and jurisdictions are exploring similar paths. One thing remains constant, however, and that’s the recognition that investor protection, through fraud prevention, transparency and compliance, must sit alongside innovation.
The era of democratised, programmable finance
Smart contracts and programmable assets are further reshaping the economics of asset management by automating processes that once required intermediaries. Blockchain technology provides an append-only record that’s difficult to tamper with, lowering fraud risk.
In real estate, this means property transfers can occur near-instantly and securely without the bottlenecks of paperwork or multiple verifications. In finance, programmable APIs already authenticate users, score risk and prevent fraud. Adding smart contracts allows fees, distributions and redemption rules to be embedded directly into the asset.
In loyalty programmes, tokenised points can be programmed for instant cross-brand redemption, enhancing customer satisfaction while lowering administrative costs. For asset managers, this automation reduces overheads, increases transparency and shortens settlement cycles.
Integrating robust Infrastructure
Robust infrastructure is essential when it comes to scaling tokenised assets for mainstream use. Custody solutions must provide secure digital wallets that aim to protect against fraud and hacking. Settlement systems need to evolve beyond slow, cross-border banking rails to support instant, borderless transfers.
Interoperability is another cornerstone. Tokenised assets should work seamlessly across platforms, whether integrating APIs between legacy banks and DeFi, or enabling loyalty tokens to move freely between airlines, hotels or car rental providers.
Regulation will help to provide stability, but it’s the technical foundations, including fraud prevention APIs, programmable compliance and standardised token formats that will determine scalability.
Of course, tokenisation doesn’t remove investment risks, and investors should perform due diligence and understand regulatory boundaries before participating. Disclosures still matter, valuations must be robust and market abuse rules still apply. Central bank bodies have also flagged that not all tokenised instruments are equal. Designs that mimic bank money’s settlement properties are more likely to be resilient than privately issued constructs with opaque backing, for example.
What to watch next
Over the next 12–24 months, two questions will shape adoption. First, can on-chain cash become sufficiently trusted and interoperable to support atomic settlement at scale across institutions and jurisdictions? Second, will secondary-market infrastructure for tokenised instruments reach the liquidity, transparency and compliance levels institutional investors require?
If the response is positive, more asset classes could follow. That’s how tokenisation merges traditional investment logic with blockchain efficiency: not by changing what assets are, but by changing how assets move.
