Asset Tokenization in Financial Markets 2025

Contents50 6.2 Settlement assets Without reliable on-chain settlement assets, using tokenized assets at scale will be challenging.150 According to a 2024 survey, 79% of respondents indicated regulatory clarity as the critical dependency for on-chain cash.151 The lack of riskless settlement assets is a roadblock when considering the BIS Committee on Payment and Settlement Systems (CPSS)–International Organization of Securities Commissions (IOSCO) Principles for Financial Market Infrastructures, which state that an FMI should conduct its money settlements in central bank money where practical and available.152 The existence of assets and on-chain cash is instrumental to achieving operational efficiency concerning ancillary functions, including coupon payments, dividends and interest.153 Institutions and customers risk delays, higher costs and compliance uncertainties without on-chain cash. While wCBDCs have undergone lengthy development cycles that have slowed adoption, a recent OMFIF survey demonstrated that 59% of market participants prefer wCBDC as the settlement asset for DLT- based debt issuances.154 Responding to market calls from financial institutions for central bank money for DLT-based settlement, the ECB shared its goal of enabling a short-term solution for this “in months, not years”, indicating an acknowledgement of the importance of delivering settlement in central bank money natively for on-chain transactions.155 In addition to central bank money, several forms of on-chain cash could be used, including fiat-backed stablecoins, reserves- backed digital currency (RBDC) or deposit tokens. For example, to enhance its platform, Broadridge successfully integrated with Fnality’s Payment System (FnPS) – an RBDC platform – paving the way for real-time DvP of intraday repos with digitally represented funds held at central banks.156 By making cash accessible and trustworthy, financial markets can accelerate the responsible adoption of tokenized assets.6.3 Operating hours An “always-on” infrastructure is a design choice dependent on market demand, risk tolerance and technology. Not all markets should or could operate on a true 24/7 basis. For example, the New York Stock Exchange (NYSE) received approval by its regulator to expand its operating hours from 16 to 22 hours, citing a need for a two-hour break for system maintenance, central clearing and asset servicing functions (coupon payments, etc.).157 Expansion of operating hours is a technical matter, but also a people, business and policy choice that will be dependent on time zones, trade matching, liquidity management and other functions that enable safe trading. Tokenization does offer functionality to operate 24/7, as demonstrated by the always-on feature of DeFi; however, regulated markets operate in a more rigid operational construct and will vary on a case- by-case basis.Design choices say regulatory clarity is the key dependency for on-chain cash to scale79% prefer wCBDC for DLT-based debt-issuances59%