Asset Tokenization in Financial Markets 2025

Contents25 % of total issuance volume DLT-based bonds by location (since 2021) EU US APAC Rest of worldSwitzerland0.3% 21% 31% 38%10% Source: Association for Financial Markets in Europe. (2024). Use of DLT and tokenisation in financial marketsFIGURE 9 Global issuance of DLT-based bonds in billions of euros and by location Global issuance of DLT-based bonds (in EUR Bn) 20210.3 20220.9 20230.8 2024 (Aug)1.3Tokenized assets Corporate bonds Corporate bonds are issued by companies to raise capital, offering varied yields and risk levels depending on the issuer’s creditworthiness. Tokenized corporate bonds represent a form of debt in capital markets, enabling fractional ownership, streamlined settlements and broader investor access. For example, the Societe Generale FORGE in France has demonstrated how tokenized corporate bonds can comply with regulatory requirements while benefitting from on-chain settlement efficiencies.29 Nomura’s partnership with BOOSTRY in Japan illustrates a growing regulatory acceptance of tokenized corporate bonds, reflecting a global innovation trend in financial assets.30Municipal bonds Municipal bonds are issued by local or regional governments to fund public projects, often providing tax advantages to investors. The Six Digital Exchange (SDX) announced in May 2024 that it had achieved more than 1 billion Swiss francs ($1.2 billion) in assets on its digital asset platform. Part of the success of these digital bond issuances on its platform is due to the availability of atomic settlement (e.g. DvP), using tokenized central bank money as part of the Swiss National Bank’s wCBDC limited phase pilot.31 Examples of tokenization benefits in fixed- income markets include: 1. Enhances information symmetry Bonds can be tokenized to create and track metadata across the following parameters: issuance amount, maturity, coupon, features and corporate actions, approved operators and transfer conditions.32 2. Facilitates operational efficiency Tokenized bonds lowered underwriting fees by an average of 0.22% of the bond’s par value, reducing 5.3% bid-ask spreads on average and with the efficiencies compounding when including retail.33 DLT can automate up to 2,000 tasks in the bond issuance process,34 which can take up to 12 weeks, save 800–1,000 person hours during issuance and reduce book-closing periods by more than 50%.35 3. Expands accessibility Conventional bonds have high minimum buy-in thresholds, limiting investor access. Tokenization can lower this barrier by fractionalizing the assets and easing the operational burden. Low investment thresholds with conventional bonds have operational burdens, including paperwork and resource costs. Lowering thresholds in public markets could increase the likelihood of regulatory limitations.