Tokenisation 3.0: From Proof of Concept to Real Capital Markets

Only a few months ago, we explored the rise of Tokenisation 2.0 — a phase defined by experimentation, proof-of-concepts, and cautious regulatory sandboxes. Yet in the hyper-accelerated world of digital assets, that discussion already feels like a lifetime ago. Tokenisation has now moved from the fringes of fintech ambition into the heart of financial-market infrastructure. This new era — Tokenisation 3.0 — is not about testing whether blockchain can host real-world assets, but about how much of global capital can migrate there.

The speed of this evolution is striking even by crypto’s standards. In less than a year, what began as pilot projects among asset managers and exchanges has matured into institutional-grade issuance platforms, tokenised money-market funds, and on-chain bond markets with billions in daily settlements. Where Tokenisation 2.0 was about the “how”, 3.0 is about the “how much” and “how soon”.

From Experiments to Infrastructure

The tokenisation story began as a technological curiosity — the idea that any asset, physical or financial, could be represented by a cryptographic token on a distributed ledger. The promise was immediate: fractional ownership, 24-hour liquidity, programmable compliance, and the erasure of frictions that have defined legacy settlement systems for decades.

But until recently, those promises largely lived inside controlled environments: regulatory sandboxes, pilot platforms, or innovation labs. Tokenised funds and bonds existed, but they were typically small-scale, privately placed, or held by the issuing institutions themselves.

In 2025, that boundary broke. The world’s largest asset managers — BlackRock, Franklin Templeton, Fidelity — now run live, regulated tokenisation platforms moving real capital. JPMorgan’s Onyx system has extended its tokenised collateral network to support overnight repo transactions. The London Stock Exchange and Nasdaq are building tokenised-asset marketplaces designed to integrate with their existing clearing systems. Singapore’s Project Guardian has progressed from experimentation to multi-bank consortiums issuing tokenised sovereign debt.

Tokenisation has ceased to be a peripheral experiment; it is becoming part of the world’s financial plumbing.

Why Tokenisation 3.0 Feels Different

Three structural shifts mark this transition from 2.0 to 3.0.

1. Institutional adoption is now capital-driven, not curiosity-driven.
In 2.0, tokenisation was a research agenda — a “what if”. In 3.0, it is a balance-sheet strategy. Asset managers are not experimenting with tokenisation for innovation theatre; they are pursuing efficiency, liquidity, and yield. The calculus is pragmatic: if tokenised funds can settle faster, attract new global investors, and operate with lower frictional costs, they offer a measurable competitive edge.

2. Regulation is catching up — deliberately, not defensively.
Regulators in the U.S., U.K., EU, and Asia have begun drafting frameworks that recognise tokenised instruments as legitimate financial securities, not anomalies. The SEC’s Project Crypto proposal, the FCA’s Digital Securities Sandbox, and the Monetary Authority of Singapore’s Project Guardian now aim to define the rules rather than merely observe the experiments. This regulatory maturation means institutions can commit serious capital without existential uncertainty.

3. Infrastructure is interoperable with traditional systems.
The breakthrough of 3.0 is not in flashy innovation but in quiet compatibility. Tokenised assets are being designed to plug directly into existing clearing, custody, and compliance rails. Custodians can now hold both digital and traditional assets under the same risk and reporting frameworks. Market data feeds and accounting systems are beginning to incorporate tokenised instruments as a standard asset class.

In short, tokenisation is no longer a new market; it is a new medium through which old markets operate.

Tokenising the World’s Capital Stack

The scope of tokenisation in 2025 reaches far beyond equities or bonds. Practically any financial claim can now be expressed as a token. Governments are exploring on-chain treasury bills. Asset managers are issuing tokenised index funds. Commodities, trade finance receivables, and carbon credits are being wrapped in smart-contract formats that enable instant transfer and programmable settlement.

The logic is simple: every asset that currently sits on a balance sheet could, in theory, be tokenised. For institutions, this unlocks unprecedented liquidity management — the ability to mobilise collateral instantly, or lend and borrow against assets without traditional intermediaries. For investors, it opens previously illiquid markets. A tokenised private-equity fund, for instance, can be traded in smaller denominations, expanding access beyond institutional clients.

Even central banks are entering the conversation. The development of wholesale Central Bank Digital Currencies (CBDCs) complements tokenisation by providing a settlement layer for on-chain transactions in central-bank money. Projects like the BIS’s mBridge and the ECB’s wholesale digital euro prototypes point toward a near-future where tokenised securities and tokenised money coexist seamlessly.

The New Role of Custody, Compliance, and Audit

As tokenised assets proliferate, the custodial function — historically the unglamorous backbone of finance — is being reinvented. Traditional custodians like BNY Mellon and State Street now offer hybrid solutions capable of holding both digital and traditional assets, integrating blockchain-based proof of ownership into conventional reporting systems.

This convergence poses deep questions for compliance and audit. When ownership and transfer histories are encoded immutably on-chain, what becomes of reconciliation — the decades-old process of confirming ledgers between counterparties? Audit trails become continuous and transparent, potentially reducing the scope for error or manipulation.

However, this same transparency introduces new complexities: cybersecurity, key management, smart-contract risk, and privacy regulation. The audit profession faces a paradigm shift — from sampling transactions to validating code. Tokenisation 3.0, therefore, is as much a governance challenge as it is a technological one.

Regulation: From Reaction to Design

In earlier phases, regulation lagged behind innovation. Authorities struggled to define what tokenised assets were: securities, digital commodities, or something else entirely. The current phase is more constructive.

The U.K.’s Digital Securities Sandbox allows firms to issue and trade tokenised financial instruments under tailored regulatory exemptions. The European Union’s DLT Pilot Regime extends similar privileges, enabling market infrastructure providers to operate tokenised exchanges. In the U.S., discussions under “Project Crypto” seek to codify how on-chain instruments fit within existing securities law.

The emerging principle is technology neutrality: the same rules should apply to equivalent financial instruments, regardless of whether they exist on a blockchain or in a central database. This philosophical shift is critical. It means tokenisation can grow without requiring a parallel universe of regulation — a prerequisite for genuine scale.

Economic Implications: Efficiency and Fragmentation

The benefits of tokenisation are tangible: faster settlement cycles (T+0 rather than T+2), reduced counterparty risk, lower operational costs, and near-instant asset mobility. For treasurers, these efficiencies can translate into material balance-sheet savings and improved capital velocity.

Yet efficiency can also breed fragmentation. Different blockchains, standards, and custodial protocols risk creating new silos in the name of interoperability. The industry’s current challenge is therefore one of coordination. If every institution builds its own private network, tokenisation’s promise of universal liquidity will fade into a patchwork of walled gardens.

To counter this, cross-chain standards and interoperability protocols are becoming the quiet heroes of 3.0. The future will belong to platforms that can bridge multiple chains, integrate seamlessly with legacy systems, and comply across jurisdictions.

A Shift in Market Power

Tokenisation 3.0 also reshapes the political economy of finance. By embedding market infrastructure directly into code, it subtly redistributes power among participants. Issuers can bypass layers of intermediaries; investors can trade peer-to-peer; regulators can monitor in real time.

For incumbents — custodians, clearinghouses, even exchanges — this demands reinvention. Their role is migrating from gatekeeping to governance: ensuring trust, compliance, and access rather than simply holding assets. For new entrants — fintechs, decentralised-finance protocols, infrastructure startups — it creates opportunities to provide modular services within a tokenised ecosystem.

Ultimately, tokenisation is eroding the distinction between “financial services” and “financial software.”

Accounting for the Tokenised World

From an accounting perspective, tokenisation raises intricate questions. When a fund’s units exist as blockchain tokens, what constitutes the official record of ownership — the chain itself or the custodian’s registry? How should unrealised valuation changes be treated if liquidity is continuous?

Standards bodies are beginning to respond. The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have both signalled the need for guidance on recognising and measuring tokenised instruments. For financial reporting, the key issues lie in fair-value measurement, derecognition, and custody risk.

The next evolution may involve on-chain financial reporting itself — real-time, verifiable statements anchored to blockchain data. Tokenisation could thus become both a financial mechanism and a reporting medium.

The Road Ahead

Tokenisation 3.0 marks the moment digital assets cease to be a parallel experiment and become part of the mainstream financial architecture. The conversation is no longer about whether the technology works, but about how institutions, auditors, and regulators will govern it.

Still, the velocity of change cautions humility. Only months separate this new reality from the world of Tokenisation 2.0that felt advanced at the time. Crypto markets evolve with exponential speed; today’s innovation is tomorrow’s infrastructure.

The next frontier — perhaps Tokenisation 4.0 — may integrate AI-driven liquidity management, real-time risk analytics, or fully automated on-chain monetary policy. For now, the task is to consolidate: to turn proof-of-concept into global practice without compromising the principles that underpin financial stability.

In 2025’s capital markets, tokenisation has stopped asking for permission. It is quietly rewriting the system itself — line by line, block by block.