Key takeaways
- “Tokenized” isn’t one thing. Issuer-native securities, custodial-wrapped instruments, and derivative exposure each represent a different legal claim on the same underlying asset, trading off direct ownership for accessibility and simpler execution – though all three share the benefit of continuous, onchain price discovery.
- Production volumes are a better signal than market-cap headlines. SIX Digital Exchange and Clearstream’s D7 platform are already running real issuance and settlement through regulated post-trade infrastructure, not just pilot programs.
- Issuing a tokenized instrument is the easy part. The harder, less-discussed challenge is running it with the same custody, reconciliation, and compliance discipline institutions apply to every other asset class, rather than building a parallel process for each new product.
Introduction
Tokenization used to move at press-release speed – pilots and announcements that were easy to admire and easier to commit to. That’s over. The proof now is coming from regulators and market infrastructure, not marketing.
In Europe, the EU’s DLT Pilot Regime is facing its defining moment: ESMA must tell the European Commission by 24 March 2026 whether to extend, amend, or make it permanent, and has already signaled it wants fewer constraints, not more. The UK has gone further still: its Digital Securities Sandbox is live, with 16 firms now issuing and settling real tokenized securities inside it, making it the most advanced live tokenization environment run by any G7 regulator. April’s PS26/7 brought tokenized funds within the UK’s regulatory perimeter, and a joint FCA/Bank of England call for input on wholesale tokenization followed a month later.
The US is moving on its own track: the NYSE is building a platform for tokenized stock trading, bringing exchange-grade infrastructure to a market so far dominated by crypto-native issuers.
Regulators writing rulebooks and exchanges building rails is a different kind of signal than another token listing. For banks and brokers, the question isn’t “if” anymore – it’s what a move into tokenized assets actually means operationally.
Classifying types of tokenized securities
The word “tokenized” is often used to describe different types of instruments, and the differences matter far more to an institution’s risk and operating model than the marketing usually lets on. Broadly, tokenized exposure to a security currently falls into three categories.
| Model | What the token represents | Typical legal basis / example | Holder rights & trade-offs |
| Issuer-native securities | The token is the security itself – the on-chain record is the authoritative register | Germany’s Electronic Securities Act (eWpG); Liechtenstein’s TVTG; bonds issued directly on regulated venues like SIX Digital Exchange | Direct, registered legal claim broadly equivalent to a traditional security |
| Custodial-wrapped instruments | A claim on an issuing entity (an SPV or note issuer) that holds the real underlying asset | Tracker certificates / structured notes issued via an SPV – e.g. xStocks, issued through a Jersey SPV under Liechtenstein regulation | Economic exposure only – dividends/splits reflected via token rebase – but no voting rights and no direct claim on the underlying shares |
| Derivative / synthetic exposure | No claim on the underlying asset at all | Perpetual futures; cash- or stablecoin-settled | Cheapest and fastest to access; accounts for the bulk of on-chain trading volume, but only offers pure price exposure with no ownership or redemption rights |
Take a €50 million corporate bond as an example. Issued natively under Germany’s eWpG, or directly onto a regulated DLT venue, the onchain record is the legal register – the holder is the registered creditor, full stop. Wrap that same exposure through an SPV instead, and what trades is a note or certificate referencing the bond: the SPV holds the underlying instrument, investors hold a claim on the SPV, and redemption runs through whatever process the issuer has set up rather than through a bond registrar. Structure it as a derivative (a total-return swap or stablecoin-settled note tracking the bond’s yield) and there’s no bond in the custody chain at all, just a price reference and a counterparty. Same credit exposure on paper, three very different things to actually hold, redeem, and account for.
Instrument types trade-offs and the one advantage they all share
Moving from issuer-native toward synthetic exposure means trade-offs: direct ownership and shareholder rights give way to accessibility, round-the-clock trading and simpler execution. None of these is necessarily the wrong choice, but an institution offering or trading a given instrument needs to know precisely which one it’s dealing with, since the implications for custody, redemption, accounting, and legal recourse differ materially at each point on that spectrum.
Whichever model an institution ends up choosing, one advantage holds across all three: continuous, onchain price discovery. Traditional securities only price when their home market is open, and blockchains have historically had to rely on external oracles to reflect that price outside trading hours. A tokenized instrument, by contrast, prices continuously onchain regardless of the underlying market’s calendar – supporting use as collateral, integration with DeFi protocols, and price feeds that don’t go dark on evenings, weekends, or holidays. It’s a structural benefit of tokenization itself, independent of which legal wrapper the instrument sits in, and one more reason the operating-model question isn’t going away.
Evaluating the market scale of tokenized assets
Due to the relatively immature state of development and rapid growth, market estimates move quickly and evaluation methodologies vary. Tracking service RWA.xyz, widely cited across the industry, put the value of tokenized real-world assets excluding stablecoins at roughly $26-31 billion by mid-2026, up from around $6 billion at the start of 2025, representing a five-fold increase in under eighteen months. Private credit and tokenized treasuries remain the largest segments, with tokenized equities a newer and faster-growing category layered on top.
Longer-range forecasts are, by their nature, less certain, but among the most widely cited is a 2025 Ripple/BCG report projecting the tokenized asset market – which includes stablecoins and tokenized deposits – growing from around $0.6 trillion today to $18.9 trillion by 2033, with a range between $12 trillion and $23.4 trillion depending on how quickly regulatory clarity and market infrastructure mature.
Europe’s own market infrastructure is generating harder, more concrete numbers alongside those market-wide estimates. SIX Digital Exchange facilitated over CHF 400 million in tokenized bond issuance in 2024 alone, and Deutsche Börse’s Clearstream reports that its D7 digital issuance platform has now surpassed four million digital issuances. These are smaller numbers than the headline market-cap figures, but arguably more telling, since they represent live production volumes running through regulated post-trade infrastructure rather than crypto-market valuations.
Institutions leading the way in tokenization
Beyond regulatory permission, what’s notable in 2026 is how many established European and UK institutions are now committing balance sheet and infrastructure to tokenization, not just running pilots.
Switzerland’s SIX received FINMA approval to merge SIX Digital Exchange into its central securities depository, SIX SIS, creating a single regulated venue where institutions can hold and settle both conventional and tokenized securities. Deutsche Börse’s Clearstream went further in June 2026, unveiling a next-generation digital securities infrastructure intended to cover the entire securities lifecycle, including issuance, distribution, settlement, custody and asset servicing, for both traditional and tokenized instruments in one hybrid platform. It will roll out the various components over 2026 and 2027.
Central banks are moving too. The Eurosystem’s exploratory work on settling DLT-based transactions in central bank money ran more than fifty trials and experiments between May and November 2024, involving 64 participants and settling over €1.59 billion across more than 200 transactions. Among them was a fifth digital bond from the European Investment Bank, settled via Banque de France’s DL3S platform, interoperating with HSBC’s Orion bond platform. The Eurosystem’s follow-on initiative, Pontes, is due to launch in the third quarter of 2026.
In the UK, Standard Chartered moved to acquire the remainder of Zodia Custody, folding institutional digital asset custody directly into the bank. The US is active too, with the SEC issuing a formal statement on tokenized securities models in January 2026, and DTCC’s tokenization pilot involving a 50-firm industry working group.
However, for European institutions, the density of production-grade activity within Europe’s own market infrastructure, including the EU, the UK, and Switzerland, is a strong enough signal of market direction.
What it actually takes to issue a tokenized security
Regardless of technological considerations, issuing a tokenized security is a legal and structural exercise before it’s a technical one. An institution must first decide which model it’s issuing under. This typically involves choosing between:
- A wrapped structure via an SPV or note. Fastest to market, but creates an intermediary layer between the holder and the underlying asset, or;
- A natively issued instrument registered under a specific electronic-securities regime. As Germany’s eWpG, Liechtenstein’s TVTG, or directly onto a regulated DLT venue operating under the EU’s Pilot Regime.
From there, the overall process is fairly standard regardless of jurisdiction. There must be an agreement between the issuer and the party arranging issuance, a commissioning contract setting out the terms of the instrument, the technical issuance itself onto the chosen ledger, and finally the point at which the instrument acquires legal effect – typically registration in whatever register or depository the relevant legal framework recognizes as authoritative.
Custody and registry arrangements have to be settled at the same time, since who holds the keys, and who is legally recognized as maintaining the register of ownership, are separate questions that don’t always have the same answer.
Issuers increasingly need to think about primary issuance and secondary trading readiness together, rather than sequentially, since investors now expect a path to liquidity from day one rather than months later.
The harder problem: running tokenized asset programs at scale
Issuing a tokenized instrument is, in some ways, the easy part, since there are plenty of vendors and venues that provide the service. The harder, less-discussed problem is the next step – running a tokenized product program with the same operational discipline that a bank or broker already applies to every other instrument it touches.
That means allocations, valuation, settlement and reconciliation processes that work consistently whether the underlying position is a tokenized bond, a wrapped equity, or a traditional security, rather than a parallel set of manual processes bolted onto the side of existing infrastructure. It means accounting and client-reporting views that accurately represent an omnibus tokenized position to the end client, and lifecycle servicing – including corporate actions, redemptions, and rebase events – handled with the same rigor a transfer agent would apply to a conventional security.
It also means compliance and control functions that don’t have to reinvent themselves for every new product line. KYC and AML checks need to apply consistently whether a client is trading a tokenized bond or a spot crypto asset. Institutions operating in the EU now need to demonstrate operational resilience under DORA and comply with MiCA’s requirements for crypto-asset service providers, in addition to existing securities regulation. Auditors and regulators alike will expect a clear, consistent audit trail regardless of which rail an instrument settled on.
Wrapped and natively issued instruments carry meaningfully different custody and legal obligations, and an institution’s control framework needs to recognize that distinction rather than treat all “tokenized” instruments identically.
None of this is unique to tokenization. It’s the same governance discipline banks and brokers already apply to every other asset class. The risk is building it separately, and badly, for each new tokenized product, issuer or venue an institution wants to support, rather than extending one governed operating framework across all of it.
What this means for banks, brokers and other financial institutions
In 2026, the idea of tokenized assets as a speculative or experimental technology bet is rapidly fading. Instead, tokenization is becoming a market-structure shift that European and UK regulators are actively codifying into rulebooks, and that established exchanges, depositories and banks are already building production infrastructure around. The institutions that benefit will be the ones that can bring tokenized products to market without treating each one as a bespoke operating project.
If your institution is starting to weigh what a tokenized asset offering would mean for your own operating model, we’d welcome the conversation. Talk to our product experts to discuss your business case and see how we think about the operating layer underneath tokenized asset programs.