Asset Tokenization in Financial Markets 2025

Contents14 Note: The table continues with additional features on the next page.FEATURE Enhances information symmetry Enables user- centricityShared system of record Flexible custodial arrangements— Off-chain synchronization – a new system of record can complicate harmonization with existing institutional books and records, possibly resulting in further reconciliations or errors. — Reversals and clawbacks – some networks do not natively offer reversibility. — Data privacy and confidentiality – the ability to comply with certain measures, such as the EU GDPR’s “right to be forgotten”.— Information symmetry – ensures visibility and auditability, driving the reduction of information asymmetry and a reduction in reconciliations. — Immutability and auditability – creates an immutable, tamper- resistant ledger that securely records and verifies asset ownership, history and rights.C— Establishes unambiguous cryptographic proof of the state of the transaction.A — Allows for the automation of key functions, such as corporate actions and asset servicing.B— Financial institutions use electronic messaging to coordinate transactions and update their own set of books and records based on structured data.A — Multiple self-contained databases lead to inefficiencies and manual reconciliations that can lead to errors and delays. — Virtually all financial assets require intermediaries for safekeeping. — Certain markets exhibit centralization risk with few parties dominating market share.— Enables self-custody through private keys at the most fundamental level. — Offers security options with multisignature and decentralized approaches.— Direct user control – allows individuals to have direct control over their digital assets and data, driving privacy, portability and user autonomy.D— Cyberattacks – the risk of third- party providers being attacked with malicious code and bypassing security. — Lost keys – the risk of users/ institutions misplacing or leaking private keys.CONVENTIONAL TOKENIZATION BENEFITS RISKSThere are five differentiated technical features of tokenization.TABLE 1 Differentiated features of tokenization Value proposition