Tokenisation
The process of representing ownership of real-world assets (property, bonds, funds) as tokens on a blockchain.
Tokenisation converts rights to an asset — a treasury bond, a commercial property, a private equity fund — into digital tokens on a blockchain. This can fragment ownership into smaller units, automate compliance, enable 24/7 settlement, and create programmable assets that interact with DeFi.
Institutional tokenisation has grown significantly since 2023: BlackRock's BUIDL fund on Ethereum surpassed $500M in assets, and major banks including JP Morgan and HSBC have tokenised bonds and deposits on private chains.
Key challenges include legal enforceability (a token must map to real-world legal ownership), regulatory compliance (securities laws), custody of the underlying asset, and oracle reliability for asset valuations.