Asset Tokenization in Financial Markets 2025

Contents38 4.1 Traditional financial infrastructure One path for driving network effects and liquidity is the integration of tokenized markets with conventional systems. A challenge faced by financial services institutions is the reconciliation between the books and records of tokenized systems and their internal books, resulting in possible discrepancies or disputes on the official claim of the asset. Addressing challenges such as these requires a staged approach to using existing investments in supranational networks to secure transactions between traditional and tokenized systems. This can avoid costly new infrastructure, spur confidence, reduce risk and accelerate adoption. Financial institutions can incrementally adopt tokenized assets by connecting public programmable ledgers to their existing infrastructure, beginning with non-cash assets and scaling as new forms of on-chain value emerge. For example, Chainlink, Swift and UBS Asset Management enabled tokenized fund transactions via Swift, reducing inefficiencies in the $63 trillion global mutual fund market.884.2 Global standards Global tokenization adoption requires robust, harmonized standards. A lack of widespread industry collaboration and fragmented innovation is cited as a major factor in stymying the progress of the adoption of tokenization.89 Estimates show 74% of DLT projects in 2023 had fewer than six participants, underscoring a need for wider participation.90 Furthermore, while the legal and technical enablement of tokenization is foundational, only the engagement of market participants will advance adoption.91 Five critical areas that would need to align for widespread usage are: roles and responsibilities, token standards, the cash leg and settlement, cross-chain interoperability and reference data.92 Standardization will require time and deep dedication and will possibly be performed in a staged manner to allow incumbents and digital natives to adapt. For example, the Hong Kong Monetary Authority convened a Programmability Working Group in 2024 to develop a common standard for programmability at scale. The system can realize transformative benefits by uniting around standards and inspiring global efficiency while boosting adoption and trusted market participation.Barriers to adoption The fungible token standardERC-20 Swiss-compliant standardCMTATThe non-fungible token standardERC-721 Security token standardERC-1400 Issuing and trading SEC-compliant securitiesERC-1450Multi-token standardERC-1155 The compliance- aware token standardERC-3643 Swiss compliant asset tokenERC-2980FIGURE 15 Common token standards (EVM) Source: Nethermind & PwC Germany. (2025). Tokenization Standards: The Missing Link for Institutional Adoption.