Tokenisation refers to the issuance and management of financial assets in digital form on distributed ledger technology (DLT), enabling the representation of assets such as equities, bonds, funds or real estate as tokens that can be transferred and settled on-chain.

Tokenisation enables faster and potentially real-time transaction settlement, reduces reconciliation needs and automates processes through smart contracts, thereby streamlining value chains, lowering transaction costs and reducing settlement risk. It also improves transparency through shared, real-time records of transactions and ownership. In addition, tokenisation can enhance liquidity and broaden market access for investors, notably through fractional ownership and new distribution channels, while also enabling issuers to reduce issuance costs and access investors more directly.

The market for tokenised assets remains at an early stage, with tokenised assets including financial instruments and real estate estimated at around $20–30 billion globally, and Europe representing a growing but still limited share of this activity (around 20%). Current use cases are concentrated in bonds, funds and certain money market instruments, while additional applications are being explored, including tokenised equities and collateral management. Scaling tokenisation will depend on several key conditions, including the availability of appropriate settlement assets (such as wholesale CBDC, tokenised deposits or regulated stablecoins), access to interoperable and resilient DLT platforms, and the development of common standards to avoid market fragmentation.

In the EU, tokenisation is supported by existing regulatory frameworks, including MiCA, which provides a legal framework for stablecoins used in tokenised ecosystems, and the DLT Pilot Regime, which enables experimentation with DLT-based market infrastructures. In the context of the Market Integration and Supervision Package (MISP), the Commission has proposed adjustments to the DLT Pilot Regime to facilitate its scaling and provide a clearer pathway from experimentation to mainstream adoption. Proposals have also been made to make financial market regulations, in particular CSDR, more technologically neutral, in order to better accommodate DLT-based market infrastructures. At the international level, central banks and international institutions, notably the BIS, are actively conducting experiments on DLT-based market infrastructures and on-chain settlement assets, including wholesale CBDC.