Benefits of Asset Tokenization

This is big news. Tokenization is fast becoming the next battleground for financial infrastructure. Goldman Sachs and BNY Mellon just made one of the boldest moves yet. Tokenization transforms real-world assets into digital tokens - unique, programmable representations of value that can be transferred, tracked, and embedded into automated financial workflows. Goldman Sachs and BNY Mellon are turning traditional money-market funds (MMF) into digital tokens. These funds - a $7.1 trillion global market managed by firms like BlackRock, Fidelity, and Federated Hermes - are commonly used by companies and asset managers to hold short-term cash in safe, interest-earning instruments like Treasury bills and commercial paper. But behind the scenes, they still run on decades-old infrastructure, full of manual steps, cut-off times, and delayed settlements. Tokenization changes that. 𝗛𝗼𝘄? By bringing the same speed, transparency, and automation we expect from modern payments and applying it to financial instruments that haven’t evolved in decades. ·      Instant settlement: Instead of waiting hours (or days) for trades to clear, tokenized assets can settle almost instantly - 24/7, without cut-off times. ·      Programmability: Rules and logic (e.g., eligibility checks, compliance constraints) can be embedded directly into the token - reducing manual oversight. ·      Fractional ownership: Investors can hold smaller, more flexible portions of a fund, which is hard to do in traditional structures. ·      Real-time tracking: Every transfer or ownership change is recorded transparently on a blockchain, improving auditability and risk management. ·      Easier collateralization: Tokenized fund shares can be pledged as collateral or moved between counterparties far more efficiently - a big advantage in treasury and liquidity management. 𝗛𝗼𝘄 𝘁𝗵𝗲 𝗽𝗮𝗿𝘁𝗻𝗲𝗿𝘀𝗵𝗶𝗽 𝘄𝗶𝗹𝗹 𝘄𝗼𝗿𝗸: ·      BNY Mellon will distribute tokenized money-market funds to institutional clients via LiquidityDirect - its cash management platform that helps treasurers and asset managers invest short-term liquidity. ·      Goldman Sachs will record and track ownership of the fund tokens on its private blockchain, providing speed, traceability, and operational efficiency. ·      The offering will support tokenized versions of funds managed by major players like BlackRock, Fidelity, and Federated Hermes. 𝗪𝗵𝘆 𝗻𝗼𝘄? The new U.S. Genius Act gives legal clarity for stablecoins and tokenized assets -removing regulatory uncertainty and unlocking tokenization across mainstream finance. 𝗪𝗵𝗮𝘁’𝘀 𝗻𝗲𝘅𝘁? This could reshape expectations around liquidity, treasury operations, and how financial assets are managed and settled. Custodians and asset managers will need to adapt. Tokenized Treasuries, equities, and real estate are already being tested. Opinions: my own, Graphic source: CNBC 𝐒𝐮𝐛𝐬𝐜𝐫𝐢𝐛𝐞 𝐭𝐨 𝐦𝐲 𝐧𝐞𝐰𝐬𝐥𝐞𝐭𝐭𝐞𝐫: https://lnkd.in/dkqhnxdg

🤓FINALLY it is published 📖(11 Nov) Tokenization of Financial Assets International Organization of Securities Commissions - IOSCO ⏳ In recent years, the financial sector has been experimenting with #DLT to deliver financial services. Proponents argue that features such as fractionalization, programmability, composability, and atomicity may create efficiencies, expand access to products, and reduce frictions. However, the adoption of new technologies can also introduce or amplify risks that regulators must understand and address to safeguard investors’ interests. 📑The Report notes that #IOSCO’s existing principles—being technology-neutral—remain applicable to tokenization. 🕵️♀️The Fintech Task Force #FTF gathered evidence through literature review, regulatory surveys, and stakeholder outreach. 📊 It found varying levels of commercial adoption, depending on use-case objectives and challenges. 👶Overall, tokenization remains nascent: 📈Growth is uneven and uncertain across asset classes, with fixed-income products and money-market funds #MMFs leading adoption. ⛓️💥Lack of cross-blockchain interoperability and credible settlement assets limits scalability. 🔄Lifecycle impact findings: 🖨️ Issuance and distribution: Tokenization has evolved, but distribution and secondary trading still rely on traditional infrastructure due to liquidity and accessibility concerns. 📩Clearing and settlement: DLT-based systems can offer faster settlement, but participants often prefer traditional infrastructure due to familiarity, operational resilience, and network effects. 🗃️Asset servicing: Some digital custody and collateral mobility improvements have been observed (e.g., intraday repo). ⚠️Risk observations: ‼️Risks vary by use case, technology, and architecture. Most risks map to existing taxonomies, but some vulnerabilities are unique to DLT—for instance, cyber-attacks, data leakage, network congestion, smart contract bugs, or private-key loss. 📝Legal uncertainty remains significant—especially regarding ownership and transfer rights of tokenized financial assets, particularly for non-native tokens. ⚖️As tokenization scales, regulators should anticipate potential market structure changes, increased dependencies, and interconnectedness that could amplify systemic risks and link tokenized finance with crypto-asset markets (e.g., tokenized MMFs used as “stablecoin” reserve assets or crypto collateral) 📚Regulatory responses by IOSCO members include: 📄 Applying existing frameworks 📄 Issuing guidance clarifying regulatory applicability 📄 Establishing sandbox regimes 📄 Enacting amended laws and regulations 📘 The Report concludes that members should consider applying IOSCO’s technology-neutral, principles-based, and outcomes-focused standards, including: 1️⃣ Objectives and Principles of Securities Regulation (IOSCO 2017) 2️⃣ Recommendations for Crypto and Digital Asset Markets (IOSCO 2023) 3️⃣ Recommendations for Decentralized Finance (IOSCO 2024)

Visa and Mastercard are giving away free money, and 99% of merchants are ignoring it. I have talked about it several times...but it is still the number one question I get from merchants. Should they use Network Tokens, or is it just another way to charge them extra for the same transaction. This is what I tell them... Network tokenization isn't just a security upgrade. It's a revenue opportunity hiding in plain sight. Visa's data shows that token transactions deliver a 4.6% rise in authorization rates globally compared to PAN transactions. Even Fiserv reports that merchants see an average 2.1% authorization uptick when using network tokens instead of primary account numbers. The fraud reduction numbers are even more striking. According to Visa's data token-based transactions drive a 30% reduction in fraud online versus PAN. When merchants use Visa-issued network tokens, fraud rates decline by an average of 26%. That's not just cost savings. It's customer trust protection. The automatic update feature solves a $20 billion problem most merchants don't realize they have. When cards expire or get reissued, traditional stored credentials fail. Network tokens get dynamically updated in real time to ensure credentials are always current. No more subscription churn from expired cards. No more failed recurring payments. Another benefit of using Visa's network tokens, is that interchange rate is up to 10 basis points lower than non-tokenized rates on qualifying transactions. For a merchant processing $100M annually, that's $100,000 in direct savings. Before counting the revenue from fewer declines. Yet most merchants still send raw PANs through their payment stack. They're paying higher interchange, accepting lower authorization rates, and losing customers to preventable payment failures. All while the networks are literally incentivizing them to switch. Microsoft's Director of Global Payments puts it perfectly: tokens provide "less opportunity for transactions to be declined because of stale credentials." Better churn stats. Inherently safer transactions. The infrastructure exists today. Most PSPs support network tokenization, and orchestrators such as IXOPAY have it build into their platform. The question isn't technical capability. It's whether you're leaving money on the table while competitors optimize their payment stack. What's your current network token adoption rate? P.S. Check out my newsletter for more Payments Strategy https://lnkd.in/e6eXZrF9

Payment Tokenization Explained If you’re handling payments in 2026, understanding tokenization is a must. Here's what caught my attention: 62% of merchants and 92% of financial institutions already use tokenization. But many teams still aren't clear on how it works or why it matters for their business. ____ What is Payment Tokenization? Think of it as a security swap. Instead of storing actual credit card numbers (like 4532-1234-5678-3511), you store a random token (like 4532-8716-5413-2416). That token links to the real payment details stored in a secure, PCI-compliant vault. When you process a transaction, you send the token. Your payment provider swaps it for the real card details behind the scenes. Simple concept, massive implications. ____ Why It Matters -> Security: If you're breached, hackers get worthless tokens, not card numbers. The token can't be reverse-engineered. -> PCI Scope Reduction: Tokens can reduce your PCI compliance scope by up to 90%. Less data = less liability. -> Faster Checkouts: Returning customers do not need to re-enter their payment details. The friction disappears. -> Multi-Processor Freedom: With the right tokenization strategy, you're not locked into a single payment provider. ____ The Three Types of Tokens This is where it gets interesting: 1. PSP Tokens: Issued by your payment service provider. Great for getting started, but they lock you to that provider. 2. Network Tokens: Created by card networks (Visa, Mastercard, Amex). They boost authorization rates and reduce interchange fees, but require network-specific integrations. 3. Merchant Owned or Universal Tokens: Provider-agnostic tokens that work across all your processors and channels. Maximum flexibility, zero vendor lock-in. Most sophisticated merchants combine universal and network tokens strategically based on their infrastructure and goals. ____ Whether you're scaling globally, managing subscriptions, or trying to reduce fraud, tokenization is foundational infrastructure. The question isn't whether to implement it, but how to do it right for your specific use case. The payments landscape has shifted from single-processor setups to multi-processor strategies. Independent tokenization is what makes that transition possible without creating a data management nightmare. 👉 Subscribe for more insights https://lnkd.in/d94JgWBU #paymenttechnology #fintech #tokenization

Tokenization as an Asset Level Transformation and Why Private Markets and to Gain In this op-ed I wrote for Benzinga I analyze why tokenization represents an asset level transformation rather than a wrapper innovation similar to ETFs and how this shift impacts private capital markets. ETFs transformed distribution. They bundled existing assets and standardized access at scale, but the underlying servicing infrastructure and market plumbing remained unchanged. Tokenization operates deeper. When ownership rights, transfer permissions, eligibility rules, and corporate actions are expressed directly in code on a shared ledger, issuance, servicing, and settlement converge into a single native workflow. 📊 This alters how private assets are structured and moved. The next growth cycle is likely to originate from private markets. Private capital has long been constrained by manual registers, fragmented legal processes, and slow transfer mechanics. Tokenization addresses these constraints at their source, converting private instruments into programmable assets that can settle, pledge, and govern natively. 📈 Private markets benefit more than public ones. For asset managers, the competitive edge shifts from product manufacturing to rule and protocol design. Transfer agency, custody, and fund administration compress into software, making compliance portable and repeatable across venues. This enables selective liquidity without forcing public listing. 🔁 Operational efficiency becomes a differentiator. The strategic battleground is now standards. Whoever defines neutral and modular rules for identity, permissions, distributions, and corporate actions will effectively become the settlement layer for private markets. 🔐 Standards determine portability, interoperability, and market power. Full article: https://lnkd.in/eAugrETe

🌎 Tokenization of Money ... Basically means recording claims on real world assets, either physical (such as ownership of a painting), or financial (such as bonds or fiat currencies in the case of stablecoins), as digital units (i.e. tokens), which can be exchanged via programmable platforms such as blockchains based on distributed ledger technology. However, tokens can exist on technological platforms different from blockchains. 💡 Examples 1. Paypal offers both network tokens on traditional computer systems as well as the stablecoin PYUSD on a blockchain. 2. Crypto assets such as Bitcoin, which are based on public or permission-less blockchains where the supply of new Bitcoins and the verification of transactions depends on anonymous participants (i.e. miners) 3. Tokenized monetary instruments such as stablecoins are based on permissioned blockchains, where the issuers of stablecoins are regulated and verification of transactions is entrusted to a few pre-approved entities—for example issuers of stablecoins. 🚀 Is it Too Early ? It is still too early to say if monetary tokens will be embraced by the public and will become a mainstream payment platform, and which instruments would be preferred. There is likely to be both competition and complementarity between various monetary tokens, including stablecoins, TMMFs, tokenized bank deposits, and CBDCs. 📍 CBDCs: issued by the central bank as digital version of fiat money, exchangeable and programmable on centralized or distributed ledgers, open to government monitoring and control; 📍 Crypto assets such as Bitcoin: anonymous miners and users on permissionless blockchains, wide fluctuations in prices, open to illegal uses 📍 Stablecoins: issued by registered and supervised companies, required to maintain reserve assets matching one-to-one with outstanding stablecoins, not earning interest, and vulnerable to risks of de-pegging or failure of issuers; 📍 Tokenized bank deposits: tokenized version of bank deposits, enjoying FDIC protection, earning interest in the case of tokenized time deposits, and posing risks of digital bank runs; 📍 Tokenized money market funds: enhanced liquidity being able to trade 24/7, but with risks of quick redemption by investors 🎯 Why Tokenize Now ? framework will enable a very efficient process of buying/selling of assets, making payments and settling transactions, and transferring ownership—all happening almost instantaneously online—instead of going through the currently cumbersome process of messaging, paying, clearing and settlement, and transferring ownership claims with custodian organizations. Bottomline - Theoretically, a country can tokenize its central bank money (the reserves of member banks held at the central bank and cash), commercial bank deposits, claims on financial assets such as stocks and bonds or investment funds; all can be put on a unified ledger. Good Read ....

The market for tokenised treasuries has jumped to $1.2 billion – 2.7x in one year. But what does this growing trend mean for traditional finance? This report looks into the tokenisation of RWAs and the rise of yield-bearing stablecoins. Here are my main takeaways: 🔶 Tokenisation is converting real-world assets into digital tokens using blockchain. It makes trading easier and boosts liquidity. 🔶 Tokenised treasuries are growing fast. From March to April 2024 alone, the market saw a 50% growth, driven by products like BlackRock’s BUIDL. 🔶 Yield-bearing stablecoins offer a reliable income, which is great for those who prefer low-risk investments. 🔶 There are 2 main types based on how yields are distributed: rebasing and non-rebasing. 🔶 As the rules get clearer, we can expect tokenised securities to move beyond treasuries and start including stocks and new types of credit products. 🔶 People are cautious about yield-bearing stablecoins because they’re complicated and it’s unclear if the yields will stay stable with changing interest rates. 🔶 The tokenisation of RWAs could hit a market value of $16 trillion by 2030. 🔶 Tokenisation increases transparency by recording transactions on the blockchain and cuts out middlemen.  🔶 Tokenised products open up new investment opportunities for both retail and institutional investors. 🔶 We’re likely to see more progress in tokenisation, including hybrid finance models that blend different asset classes on the blockchain. Big names like BlackRock getting into tokenisation signals that blockchain is becoming more and more important for capital markets. #Fintech #Blockchain #Tokenisation

JPMorgan’s launch of “My OnChain Net Yield(MONY) Fund on Ethereum isn’t just another tokenization headline it is a tangible step toward re-architecting private fund infrastructure. 1) From T+1/2 days to instant settlement impact Tokenized fund units settle digitally in near real-time, contrasting sharply with traditional T+1/T+2 processes. This isn’t theoretical, instantaneous settlement reduces counterparty risk, liberates capital for redeployment, and materially improves intraday liquidity. For institutional treasuries and asset managers juggling global cash flows, it’s critical for balance-sheet efficiency. 2) Liquidity & democratization Blockchain inherently enables fractional, 24/7 tradability. Whereas large fund minimums have historically excluded smaller allocators, tokenized structures as seen with BlackRock’s BUIDL demonstrate that money market and treasury funds can be accessed in smaller denominations and moved programmatically. This is what democratized wealth creation is all about. 3) Collateral & capital flexibility Tokenized fund positions are already being used as on-chain collateral, opening entirely new liquidity channels across ecosystems without liquidating positions. NettyWorth has been pioneer in accepting these tokenised collaterals 4) JP Morgan isn’t the first one to Tokenise Securitize, the leading tokenization infrastructure partner, has tokenized over $4B+ in assets with marquee sponsors including BlackRock, Apollo, KKR, Hamilton Lane and VanEck anchored by BlackRock’s BUIDL as the largest tokenized real-world asset today. The company’s pending public listing at a ~$1.25B valuation underscores that the market is not only building but voting with capital on tokenization’s viability. We are in a phase where tokenization has moved past “proof of concept” into institutional product market fit. JPMorgan’s MONY is the latest signal, but the broader ecosystem from BlackRock’s tokenized funds to Securitize’s scale illustrates that tokenization is solving real operational frictions and expanding who can effectively participate in private markets. Companies like DeFa by InvoiceMate, ZIGChain NettyWorth are already working with funds on tokenised invoices, tokenised Private debt, tokenised RWA. When do you think we’ll reach 100B in tokenised funds Bhoomika Kesaria, CFA Ankush Goyal, CFA Abdul Rafay Gadit

Financial Times - Tokenised Money Market Funds (MMFs): Momentum & Scale in Mid‑2025 - Collateral Mobility and Capital Efficiency 1. Explosive Market Growth - Total on-chain RWA (Real‑World Asset) tokenisation has surged to approximately $24.3 billion as of June 2025, up from around $8.6 billion at the start of the year—a stunning 260% increase in H1 - Specifically, tokenised U.S. Treasuries now exceed $5.75 billion as of April 2025 2. Major Products & Issuers on the Rise - BlackRock’s BUIDL fund has more than doubled since April, reaching $2.5 billion AUM by mid‑2025 and remains the top player in tokenised Treasuries - Franklin Templeton’s FOBXX continues its climb on-chain—now approaching $700 million AUM across eight blockchains (Ethereum, Stellar, Solana, Aptos, Avalanche, Polygon, Arbitrum, Base) - Other notable players include Matrixdock’s STBT, alongside emerging offerings from Fidelity Investments, Aberdeen (via Hedera), and J.P. Morgan. 3. Institutional Adoption & Utility Expanding - On‑chain MMFs now offer true real-time settlement, transparent daily NAVs, and yield, unlike stablecoins - These funds are increasingly used as collateral in derivatives and OTC markets, with institutional players like Goldman Sachs, BNP Paribas, Citadel, Tradeweb, and DRW actively engaging - Infrastructure firms like Securitize have issued over $2.8 billion in tokenised treasury assets, capturing over 70% of market share in tokenised Treasuries So What? - Total tokenised assets now top $24 billion, with tokenised Treasuries alone at nearly $6 billion - Tokenised MMFs now command 3%+ of the stablecoin market cap, up from under 2% earlier this year—even as stablecoins grew by over $20 billion - They’ve evolved from experimental products into vital financial infrastructure—bridging TradFi and DeFi and powering institutional collateral flows - And the true inflection is yet to come: the game-changing opportunity—instant collateral mobility across TradFi and DeFi rails—still lies just ahead - When that arrives, tokenised MMFs will likely become the backbone of institutions' liquidity and capital efficiency strategies https://lnkd.in/e85RPbhU

What if owning a piece of real estate—or a Picasso—was as simple as owning a token? Sounds like science fiction? It’s not. It’s the power of tokenization. Tokenization is bridging the gap between physical assets and digital finance—transforming Real-World Assets (RWAs) into blockchain-based tokens that are transparent, accessible, and divisible. Here’s how it’s redefining ownership as we know it: 🏠 Fractional ownership unlocked → Invest in portions of high-value assets without massive capital. 📜 Smart contracts boost efficiency → Automate rights, transfers, and payments with built-in transparency. 🔄 Fungible vs Non-Fungible → Whether identical or unique, tokens enable digital representation of ownership. 🧠 Bridge to institutional adoption → RWAs on-chain make legacy finance more agile and accessible. It’s not just about tech—it’s about access, efficiency, and innovation. As someone working at the intersection of blockchain and digital transformation, I’ve seen how this shift opens new opportunities not only for startups, but also for traditional players ready to evolve. What’s your take—do you see tokenization becoming mainstream in the next 5 years? Don't miss upcoming insights on Digital Transformation 🔔 Activate the bell to stay up to date! And if you want to delve deeper, take a look at the DeltalogiX blog > https://bit.ly/4hDs9HU #Tokenization #BlockchainTechnology #DigitalAssets