The tokenization of the financial market is no longer a topic only for crypto enthusiasts: major industry players are increasingly transferring rights to real assets onto the blockchain, turning stocks, bonds, and other instruments into digital code that can be owned, transferred, and accounted for more quickly.
Many still associate blockchain almost exclusively with cryptocurrencies. But for financial companies, the main value of this technology has long lain elsewhere: it helps digitize ownership rights to real assets and simplify operations with them.
Estimates suggest that by 2030, the market for tokenized assets could grow approximately 30-fold and reach 16 trillion US dollars. That figure no longer seems fantastical. Tokenization has the potential to significantly alter finance, accelerate settlements, increase the accessibility of investment products, and make financial markets more flexible.
In practice, this means faster transfer of rights between investors, a lower entry barrier to expensive assets, and less manual work for financial infrastructure. Investors gain access to instruments that were previously too expensive or inconvenient, businesses reduce costs for accounting and settlements, and platforms can automate some operations through digital rules.
Why Cryptocurrency Didn't Become the Main Driver of Blockchain
Cryptocurrencies were initially created as an alternative to banks. The idea was simple: to simplify transactions, make them safer, more convenient, and anonymous. Over time, interest in them grew sharply, and cryptocurrency became not only a means of payment but also a speculative asset for investors.
Bitcoin's rise to tens of thousands of dollars in a few years and the rapid surges of individual coins still attract those hoping to catch the next powerful rally. For investments, this seems enticing, but the downside is obvious: such assets can fall just as quickly.
High volatility suits traders and investors willing to take on serious risk. But for major institutional players, swings of tens of percent per day are too painful. They might hold a small portion of their portfolio in Bitcoin, but very few dare to build their entire strategy on it.
Attempts to make cryptocurrency the basis of a corporate investment model have already led to large unrealized losses. Even companies that adhered to the principle of constant Bitcoin buying for years were at some point forced to sell part of their coins to lock in losses.
The payment application of cryptocurrencies also hasn't become mainstream. Anonymity, the complex origin of coins, and the need for thorough transaction checks deter large market participants. Such checks take time and money. Technical barriers also hinder progress, making it difficult for ordinary users to perceive crypto transactions as an everyday tool.
The fragmentation of the global financial system and sanctions gave crypto payments a strong impetus. By last summer, around 350 billion US dollars in crypto had come into Russia. But this growth may be temporary: if traditional settlement chains are restored, some exporters and importers will again choose classic bank payments.
How Tokenization is Changing the Financial Market
In finance, tokenization is the conversion of an asset's rights into a digital token that exists and is transferred on the blockchain. The asset itself can remain conventional: the method of accounting, transferring, and confirming rights to it changes.
Stock market tokenization is the application of this logic to stocks, bonds, and other securities. For example, a share can be represented by a digital token, and the record of ownership is updated on the blockchain with each transaction. If platform rules and the regulator allow it, an investor can buy not just a whole large package but also a small fraction of such an instrument.
Tokenization has interested major financial organizations more than the very idea of cryptocurrency as a replacement for money. Its advantage is that it doesn't create a new asset from scratch but transfers an already existing instrument into the digital environment. It is possible to tokenize:
- Securities
- Bonds
- Stocks
- Other financial instruments
Beyond the stock market, it's possible to tokenize real estate, commodities, works of art, and other real assets. Such assets are often called RWA, or Real World Assets: these are property and rights from the real economy that receive digital representation on the blockchain.
In other words, the asset in accounting and legal records remains the same, but the ownership right and its record are fixed on the blockchain. The token on the blockchain becomes a digital representation of this right. This approach doesn't break traditional finance but complements it with new infrastructure.
How Asset Tokenization Works
The tokenization process typically consists of several steps:
- The issuer or owner selects an asset that can be converted into digital form.
- It is legally established what rights the token grants: ownership, income receipt, participation in a deal, or another claim.
- A platform issues tokens on the blockchain, and a smart contract sets the rules for their transfer and accounting.
- Investors buy or sell tokens, and the record of the right transfer is updated in the digital ledger.
- The platform, brokers, depositories, or other infrastructure participants oversee settlements, storage, and rule compliance.
The key technologies here are blockchain, smart contracts, and tokenization platforms. Blockchain stores records of rights and transactions, smart contracts automate the terms of operations, and platforms connect issuers, investors, and financial infrastructure.
In information security logic, tokenization has long been used as a way to replace sensitive data with a secure digital designation. In the financial market, the principle is similar: instead of a complex chain of paper or depository accounting, a digital record appears that can be transferred and verified faster.
In the summer, the value of tokenized assets reached 31 billion US dollars. For comparison, at the beginning of last year, the figure was about 5 billion US dollars. This surge was primarily driven by major asset managers and investment banks who need to work more efficiently with trillions of dollars in assets.
More and more securities are being transferred to the blockchain, and test deals are becoming more regular. In mid-July, over 40 major companies from the United States of America conducted multimillion-dollar deals with tokenized assets on the real market. In October, such an opportunity is planned to be opened to all investors.
The Main Advantages of Tokenization
Tokenization changes the very mechanics of ownership. When an investor buys a stock through a broker, behind the seemingly instantaneous operation lies an entire infrastructure: depositories, clearing, rights accounting, and settlements between participants. In the app, everything looks fast, but at the system level, the deal goes through several stages.
For investors, this means a lower entry barrier, access to new asset classes, and more transparent rights accounting. For businesses — fewer costs for operational processes, more automation, and the ability to build new capital-raising models. For infrastructure — faster settlements and less dependence on long chains of intermediaries.
If a security is packaged into a digital token, these processes can be significantly accelerated. The transfer of rights and payment can occur almost simultaneously, without waiting for the standard settlement cycle.
Key Advantages of Tokenization
- 24/7 Trading — exchanges operate on a schedule, close on weekends and holidays, but a tokenized asset doesn't need to wait for Monday or for the depository to open. Example: a deal can be conducted at any moment.
- Settlement Speed — on traditional exchanges, transactions are often finally settled 1–2 business days after the investor's order. Example: in the blockchain, settlement and transfer of ownership can be synchronized immediately.
- Fractionalization — an asset can be divided into small shares. Example: US Treasury bonds at some brokers are sold in packs of 10 at a cost of about 1 thousand US dollars; if an investor has 1.5 thousand US dollars, they can only buy one pack, but after tokenization, such a barrier disappears.
Why Risks Remain
Tokenization does not eliminate market and operational risks. The faster deals occur, the harder they are to cancel or review. For the stable operation of such a system, high liquidity is needed; otherwise, even a technologically convenient instrument won't become a full-fledged part of the market.
There are also technological risks: platform hacks, errors in smart contracts, key storage failures, and problems when transferring data between systems. The more money flows through digital infrastructure, the higher the cost of any technical error.
Legal and regulatory risks also remain important. It's necessary to clearly understand who is responsible for token issuance, how ownership is confirmed, how the investor is protected, and what happens in case of a dispute between deal participants.
A separate problem is interoperability and standardization. If different platforms use different rules for issuance, storage, and accounting of tokens, it becomes harder for an asset to circulate freely on the market. Without common approaches, tokenization might accelerate individual deals but not the entire financial system.
There is also a regulatory context. Any digital transformation of finance requires clear rules, especially when it comes to ownership rights, asset accounting, and investor protection. In Russia, such processes will inevitably be tied to the position of the Central Bank of Russia as the key regulator of the financial system.
Overseas, approaches differ: in the EU, USA, and Asian countries, regulators define the status of tokens, requirements for platforms, and investor protection rules differently. The main challenge for all markets is similar: to integrate tokenized assets into the existing financial system so that the technology accelerates deals but does not blur the participants' responsibility.
For economics as a science, tokenization is interesting because it changes not only the form of accounting but also market participants' behavior. If owning assets becomes cheaper, faster, and more accessible, the entire investment ecosystem changes: from how brokers work to the structure of demand for different classes of instruments.
A long path remains to reach a market of 16 trillion US dollars. Perhaps it will take not five years but more. But the main point is already clear: it is tokenization that has brought blockchain into the major financial industry and made it useful for those players whom cryptocurrencies never fully convinced.
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