Will tokenisation reshape financial markets?

Tokenisation has become one of financial services’ favourite buzzwords. Banks, asset managers, regulators, and fintechs are increasingly exploring how financial assets can be moved onto new digital infrastructure, with potential benefits ranging from lower costs to greater investment access (FCA, Progressing fund tokenisation). 

Despite the attention tokenisation is attracting, it remains relatively difficult to understand. At its simplest, tokenisation means using distributed ledger technology (DLT) to represent an asset or ownership of an asset (FCA, Progressing fund tokenisation). The Bank for International Settlements (BIS) goes a step further, noting that tokenisation “enables the integration of messaging, reconciliation and asset transfer into a single, seamless operation” (BIS Annual Economic Report, 2025). In other words, the asset itself does not necessarily change, but the infrastructure behind it does. 

This could bring practical benefits for financial markets. Research from the International Monetary Fund (IMF) suggests tokenisation could increase efficiency by simplifying the processes involved in creating, managing and redeeming assets (IMF, Tokenization and Financial Market Inefficiencies, 2025). It could also lower trading costs by reducing some of the risks and frictions involved in transactions, while creating more competition between brokers. 

In the UK, regulators are now moving beyond simply discussing what tokenisation could look like. In April 2026, the Financial Conduct Authority (FCA) published a policy statement explaining how authorised fund managers can use DLT within the existing regulatory framework. Alongside its guidance on tokenisation, the FCA also introduced a new ‘Direct to Fund’ model, allowing investors to deal directly with a fund. The FCA argues that tokenisation could create new ways for funds to reach investors and broaden access to areas such as private markets and infrastructure investment (FCA, Progressing fund tokenisation, 2026). 

Tokenisation also has potential applications beyond funds. In September, the FCA published feedback following a ‘Call for Input’ with the Bank of England on tokenisation in wholesale markets. Among the 123 responses, many saw potential for tokenisation to improve processes that take place after a trade, including the transfer of collateral between financial institutions (FCA, Tokenisation in wholesale markets, 2026). 

These developments are increasingly being reflected in real-world activity. According to the Investment Association, Baillie Gifford launched the first public fully native UK tokenised fund in June 2026, while Aviva began a fund tokenisation project with Ripple in February (Investment Association, Tokenised Funds). 

The question is therefore beginning to shift from whether traditional financial assets can be tokenised, to whether doing so actually delivers meaningful benefits. 

A potential attraction of tokenising assets is the ability to trade them outside traditional stock-market hours. Round-the-clock trading could make markets more accessible to investors in different time zones, while also allowing them to respond quickly to developments rather than waiting for markets to reopen (CNBC, Tokenized stock trading takes off overseas as Goldman, other U.S. companies object, 2026). Yet while tokenisation may offer advantages such as greater accessibility and trading flexibility, some of its wider benefits may be less visible to the end investor. Someone buying into an investment fund, for example, may care considerably more about its performance and cost than the technology that enables it. Tokenisation’s value to investors may therefore ultimately depend on whether these changes translate into a cheaper, easier or more accessible investment experience. 

New financial infrastructure also brings new risks. As tokenised equities become more widely traded, questions remain over what investors actually own and whether they receive the same rights as traditional shareholders, particularly voting rights. These uncertainties have already prompted companies like Goldman Sachs and Microsoft to object to having tokenised versions of their shares traded through certain venues (CNBC, Tokenized stock trading takes off overseas as Goldman, other U.S. companies object, 2026). 

This leaves financial services at an interesting point. The regulatory framework is developing, major financial institutions are experimenting with the technology, and there are clear potential benefits to changing the infrastructure behind today's markets. Yet tokenisation still needs to demonstrate where it produces a genuinely better outcome than the systems it seeks to replace. 

This is also why judging tokenisation by whether consumers are familiar with the term may miss the point. Its most significant effects could happen behind the scenes, changing how funds operate, how assets move between institutions, and how financial transactions are processed. 

For an industry that loves a new buzzword, the ultimate sign of tokenisation’s success could therefore be rather ironic: the people benefiting from it may barely need to know it exists.