Operationalising Tokenisation: Why Infrastructure, Not Assets, Will Determine Who Wins

Tokenisation has moved rapidly from theoretical discussion, through live experimentation, and into early-stage institutional deployment across global financial markets. Multiple projects have been announced and are underway, including tokenised money market funds such as Franklin Templeton’s BENJI or BlackRock’s BUIDL, digital bonds issued by the World Bank and European Investment Bank or Siemens’ tokenisation of commercial paper. Yet despite this activity, tokenisation has yet to operate at full institutional scale, with much of the market still in early-stage production and issuance volumes that remain modest relative to traditional financial markets.

The reason is not necessarily a lack of demand for tokenised assets. Rather, it is the absence of production-grade infrastructure capable of supporting tokenisation as an institutional market activity. Too often, conversations focus on what asset should be tokenised, rather than how those assets will be issued, held, transferred, settled and governed at scale. For tokenisation to gain real traction, maturity of infrastructure rather than asset innovation should be the primary focus.

Tokenisation is an operating model change, not a product feature

At its core, tokenisation represents a fundamental change to how financial assets are represented, transferred and administered. It is not simply a new wrapper around existing products. A tokenised asset introduces new operational dependencies across issuance, custody, transaction processing, settlement finality, corporate actions and regulatory reporting.

In pilot programmes, many of these dependencies are abstracted away. Transactions are limited, participants are known and operational risks are tightly controlled. At scale, however, tokenisation must integrate with the full institutional operating stack: trading systems, risk engines, compliance workflows, accounting platforms and client reporting. Without this integration, tokenised assets remain operational outliers rather than scalable instruments.

This is why infrastructure maturity is decisive. Institutions cannot rely on bespoke workflows or manual intervention if tokenisation is to support meaningful balance sheet exposure or client distribution.

Issuance: from smart contracts to institutional control

Issuance is sometimes portrayed as a simple smart contract deployment. In practice, institutional issuance requires far more. Tokenised instruments must embed legal enforceability, issuance controls, eligibility rulesand lifecycle events such as minting, burning and corporate actions.

Institutions require configurable issuance frameworks that align with existing governance processes and legal documentation, rather than experimental code deployments. This includes clear role separation, auditabilityand change management – features that are standard in traditional capital markets infrastructure but often underdeveloped in tokenisation pilots.

Without robust issuance controls, institutions face unacceptable legal and operational risk, particularly as issuance volumes increase.

Custody: the cornerstone of institutional trust

Custody is arguably the most critical infrastructure component for tokenisation. Institutional participation depends on secure asset segregation, clear ownership records and robust key management frameworks. While self-custody may suffice in experimental environments, it is incompatible with fiduciary obligations, regulatory expectations and client asset protection at scale.

Tokenisation requires custody models that support both onchain and offchain assets, integrate with existing safekeeping frameworks, and provide real-time visibility without compromising security. Importantly, custody infrastructure must support not only holding tokens, but also administering them, for example, handling income distributions and voting rights.

Until custody infrastructure meets institutional standards consistently across jurisdictions, tokenisation will struggle to gain broad adoption.

Transfer and settlement: bridging on-chain efficiency with market reality

One of tokenisation’s most cited benefits is improved settlement efficiency. However, settlement finality in institutional markets is not solely a technical concept; it is a legal and regulatory one. Institutions require clarity on when ownership legally transfers, how disputes are resolved, and how settlement interacts with existing payment systems and liquidity management frameworks. It also requires the wider uptake of onchain settlement assets such as stablecoins or tokenised deposits to be efficient at scale.

Scalable tokenisation infrastructure must support delivery-versus-payment mechanisms, integrate with fiat and tokenised cash rails and accommodate different settlement models depending on asset class and jurisdiction. It must also support exception handling, reversals and regulatory intervention – realities that are often ignored in pilot designs.

True efficiency gains emerge not from bypassing market structure but from modernising it in a controlled, compliant manner.

Lifecycle management: where pilots commonly fail

Lifecycle management is where many tokenisation initiatives encounter friction. Corporate actions, redemptions, income payments, collateral substitutions and regulatory disclosures are routine in traditional markets yet frequently under-engineered in tokenised environments.

At scale, institutions need automated, auditable lifecycle processing that mirrors or improves upon existing standards. This requires data models, event frameworks and operational tooling that can support complex asset behaviour over time, not just point-in-time transactions.

Without mature lifecycle infrastructure, tokenised assets may introduce greater operational complexity rather than reducing it.

Interoperability and integration: the hidden scaling constraint

Tokenisation will not replace existing financial infrastructure overnight. For the foreseeable future, tokenised and traditional assets will coexist. This makes interoperability essential. Institutions require infrastructure that can reconcile onchain activity with offchain systems, support multiple blockchain networks and avoid vendor or protocol lock-in.

Equally important is integration with existing operational teams and processes. Infrastructure maturity is not only technical; it is organisational. Tokenisation must fit within existing control frameworks, risk models and regulatory oversight structures to be viable at scale.

Infrastructure first, assets second

The long-term success of tokenisation will be determined less by which assets are tokenised and more by whether institutions can operate tokenised assets with the same confidence, control and efficiency as traditional instruments. This requires infrastructure that is resilient, compliant, interoperable and deeply integrated into institutional operating models.

Tokenisation’s promise is real. McKinsey forecasts that tokenised assets (excluding cryptocurrencies and stablecoins) could reach around $2 trillion by 2030, with an optimistic scenario up to $4 trillion. However, realising this promise depends on shifting the conversation. Moving beyond pilots means treating tokenisation not as an experiment in asset innovation but as a transformation of market infrastructure. Those institutions that prioritise infrastructure maturity today will be best positioned to capture tokenisation’s benefits tomorrow.