Will We Tokenise Everything?

Tokenisation has shifted from concept to operating agenda - it is literally everywhere now as a tag line. Exchanges, CSDs, transfer agents, custodians, banks, and fintech platforms are building rails for tokenised cash, funds, treasuries, repos, private credit, real estate, and increasingly, public securities. The motivation is not novelty, it is market plumbing, compress issuance and servicing costs, harden settlement, widen distribution, and enable programmability. The centre of gravity is moving from pilots to product, where issuance calendars, corporate actions, and reconciliations become code paths. If assets behave like APIs, value chains will reorganise around the best endpoints.

The incentive stack

In primary markets, tokenised issuance replaces bespoke documents and sequenced handoffs with parameterised workflows, standardised term sheets, embedded transfer restrictions, machine readable covenants, and registrar updates written once to a shared state. The economic effect is tangible, legal drafting becomes templates, bookbuilding becomes a programmable auction, closing packs become state transitions, and all-in funding costs fall as frictional spend and time to market reduce. On settlement, atomic delivery versus payment moves exposure from T+N to T+0, not for theatre, but for balance sheet efficiency, replacement cost risk shrinks, margin demands ease, and collateral cycles tighten, while intraday liquidity becomes the constraint to manage rather than end-of-day batch windows. Servicing also improves when corporate actions are expressed as rules that execute on chain, coupons, redemptions, amortisations, and votes are computed from the same canonical state read by custodians, transfer agents, and issuers, which narrows disputes to data and identity rather than spreadsheet interpretation. Liquidity can extend to the long tail because token form supports fractional tickets, curated secondary venues, and automated market making for instruments that rarely trade today, discovery improves for private credit, receivables, and structured notes when provenance and settlement assurances are clear, and liquidity design, from auction formats and tick sizes, to rebates and inventory finance, becomes explicit venue logic. Distribution widens as cap tables update in near real time, investor entitlements and restrictions are visible to the entire chain of distributors, and cross border placements inherit jurisdictional policy from investor credentials, reducing reconciliation work because participants rely on a shared, auditable state.

Who is building, and what they seek to capture

Stock exchanges and CSDs are defending mandate by moving listings, depository receipts, and corporate actions into token form while opening new fee lines in registry, lifecycle services, and data, with phased rollouts that begin with funds and notes, then progress to selective equities as rulebooks settle. Banks are advancing on two interlocking tracks, tokenised cash that reduces frictions in repo, FX, and securities financing, and tokenisation of client assets that modernises issuance, custody, and distribution, with demonstrably faster delivery when digital assets sit under empowered leadership with P&L, accountable risk ownership, and authority across custody and markets. Asset managers and fund administrators are turning share class logic, eligibility, gates, and fee schedules into code, transfer agency becomes event driven, subscriptions and redemptions settle atomically against tokenised cash, NAV strikes are streamed rather than emailed, and distribution broadens when advisers can read the same source of truth for entitlements. Corporate treasurers and fintech platforms are applying tokenisation to commercial paper, supply chain finance, receivables, and structured payables, compressing DSOs and enabling just-in-time collateral posting, while monetising issuance as a service, lifecycle data, and curated secondary venues. Public actors and consortia are exploring municipal debt, infrastructure notes, trade documentation, energy and environmental credits, using shared rulebooks with code enforced eligibility, measurement, and verification to reduce fraud and leakage and to improve auditability.

Business models that pencil

The revenue lines are straightforward and defensible when execution quality is high. Issuance and lifecycle services can be priced per asset and per holder, with parameterised term sheets, KYC, primary distribution, event subscriptions, and registrar functions packaged as modular products. Settlement and collateral services monetise atomic DvP, intraday credit, fractional collateral eligibility, and programmable escrow, while custody and policy control generate tiered account fees for segregation, insurance, attestations, and granular enterprise policy engines. Data and analytics become a product in their own right, reference data, lifecycle telemetry, corporate action state, and reconciliation elimination are valuable to issuers, distributors, and regulators. Liquidity services can package market making toolkits, RFQ workflows, auction formats, borrow lend orchestration, and rebate design, and developer platforms can sell APIs, SDKs, certification, and SLAs that make the rails buildable by third parties.

Why acceleration is happening now

Three conditions have aligned. First, the cash leg has become credible, tokenised deposits, regulated fiat backed stablecoins, and bank connectivity provide settlement assets with predictable behaviour across stress, which makes atomicity practical rather than performative. Second, regulation is converging on a pragmatic view that token form maps to existing securities, disclosure, and market conduct rules, which gives issuers and venues enough policy certainty to move core use cases into production. Third, operational telemetry from pilots and early products has made the economics legible, fewer breaks and fails, shorter closings, lower manual touch points, and client demand for flexible distribution windows are visible in service metrics. The result is an evolutionary migration path, start where frictions are highest, private credit, funds, structured notes, cash like instruments, then expand to listed instruments as controls, staffing, and supervisory comfort scale.

Design choices that separate durable platforms from headlines

Durable platforms align on standards and semantics, using open token formats that encode identities, transfer rules, and corporate actions consistently, so the same event yields the same state for every custodian and venue. Chain strategy is multi network because clients and partners are heterogeneous, however semantics must remain uniform, fees predictable, deprecation paths explicit, and monitoring consolidated, with admission and routing policies that do not outsource market integrity to volatile fee markets. Identity and compliance must be native, credentials, allow lists, sanctions checks, and travel rule messaging belong at the token and venue layers, with selective disclosure and audit trails legal and compliance can sign off without screenshots. Cash leg certainty is non negotiable, tokenised deposits are used for client perimeter flows, regulated stablecoins for ecosystem edge flows, and contingency rails into RTGS and instant payment systems provide graceful degradation, which makes atomic settlement a property of the system. Custody must combine institutional key management, granular policy, segregation, insurance, and tested recovery, while retail abstractions hide keys without hiding risk, and break glass procedures are documented and exercised. Interoperability with legacy systems remains essential, transfer agents, registrars, and core banking must read and write the same state, with file based fallbacks for the long tail, but with the programmable ledger as the system of record to shrink reconciliation. Finally, operational resilience requires halts, circuit breakers, rollbacks, and dispute resolution aligned with today’s rulebooks, and change control for smart contracts with transparent versioning, signoff, and rollback under clear authority.

Risk, properly named

Law and market conduct still apply, securities disclosure, suitability, market abuse surveillance, and investor protections do not disappear in token form, they become more observable, which should simplify enforcement and reduce ambiguity. Liquidity and run dynamics change shape, atomic settlement reduces credit exposure and fails, while intraday liquidity and collateral management grow in importance, which calls for stress testing across legacy and token rails simultaneously. Standards fragmentation is a live risk, multiple token formats and inconsistent chain semantics balkanise liquidity and raise integration costs, which means governance around standards is a first order concern rather than a committee talking point. Key management and recovery introduce new operational risks, policy compromise and key loss must be anticipated, recovery without uncontrolled reversibility requires clearly defined authority and comprehensive logging. Data privacy must be reconciled with transparency, selective disclosure, privacy preserving attestations, and tiered access are necessary for institutions to comply with confidentiality obligations. Change management for upgradeable contracts demands auditable governance and disciplined release practices, since silent upgrades and opaque admin keys create novel failure modes.

Analytical signals to watch

Execution quality will show up in a few measurable places. Cycle time from mandate to pricing to close for comparable issues should compress in token form. Break rates and fails per million servicing and settlement events should fall as systems converge on a single source of truth. Capital efficiency should improve as portfolios move from T+N to T+0, reflected in lower margin and collateral usage for identical exposures. Liquidity profiles for previously illiquid assets should deepen, with better quoted depth, tighter spreads, and higher inventory turnover. Distribution reach should expand without bespoke bilateral work, visible in a broader set of eligible distributors and investors by jurisdiction. Cost to serve for registrar, custody, and transfer agency functions should decline on a per asset and per holder basis as manual reconciliations disappear.

A measured outlook

Ok, so the direction is clear then. When an asset can be issued faster, serviced with fewer breaks, settled with certainty, and distributed more broadly, token form will outcompete file based form. We will not tokenise everything at once, we will tokenise the segments with the largest operational frictions and clearest controls, funds, treasuries, private credit, structured notes, and short dated corporates, then extend to listed instruments as standards and supervision mature. Exchanges, CSDs, and banks that treat tokenisation as a product capability, integrated with custody, cash, identity, and market supervision, will convert operational savings into share capture. The strategic error now is indecision, issuers, investors, and venues are already selecting rails, and institutions that define a coherent posture, govern it well, and execute with discipline, will set the baseline others must follow.