Asset Tokenization in Financial Markets 2025

Contents8 1.3 Tokenization models According to the World Economic Forum, tokenization is differentiated from conventional systems in the following ways:3 This report adopts these three viewpoints to identify two tokenization models – backed and native – and analyses their impacts across issuance, value, ownership, transaction or settlement, custody and redemption.4 Fundamentally, tokenization acts as a capability to enhance settlement operations, underpinned by the asset life cycle functions. PROOF OF VALUE Provides evidence or verification that an asset has a certain value or uniqueness PROOF OF OWNERSHIP Establishes unambiguous ownership and assigns agency of the asset to the rightful owner PROOF OF TRANSACTION Produces a verifiable record to provide transaction history and evidence of settlementFoundational key concepts 1.2 Programmable ledgers Programmable ledgers or DLT and blockchain systems support smart contract-based processes. Programmable ledgers may be public or private and permissioned or permissionless, each with varying trade-offs and advantages. These systems allow financial assets to be tokenized by codifying essential data and properties of the asset on the ledger or on-chain.2 — “On-chain” refers to an asset or activity being operated on a programmable ledger; this term is borrowed from the popularized “blockchain” term, which is a specific type of programmable ledger. — “Off-chain” refers to financial processes or asset life-cycle functions taking place on non-tokenized, or conventional, systems.