Beyond the Token: Five Lesson for Scaling Institutional Tokenisation

Reading time: 6 minutes

Tokenisation is moving into a more practical phase. The question is no longer simply whether financial assets can be brought on-chain. It is whether doing so creates a product that is legally robust, operationally sound and genuinely more useful.

That shift framed a recent Fintech Week Singapore panel on “Tokenisation & Digital Assets: Building the Infrastructure of Future Money.” Moderated by Avalon Ingram of Swift, the discussion brought together perspectives from DigiFT, EY, The Block Capital, Pnyx Hill and GR Partners, and the Labuan Financial Services Authority.

The clearest takeaway: tokenisation will scale when the technology recedes into the background and the benefits become impossible to ignore.

The panel in 30 seconds

• A token is only one part of a complete financial product. Legal rights, governance and operational infrastructure matter just as much.
• The opportunity goes beyond creating liquidity. Tokenised assets can become programmable, composable and usable as collateral.
• Regulation is not separate from product design. It is a core part of building trusted, institution-ready markets.
• Interoperability remains a major missing piece. Isolated tokens and platforms cannot deliver the full efficiency gains of on-chain finance.
• End users should not need to understand the underlying technology. They should experience a product that is accessible, reliable and easy to use.

1. A token is not the product

It is easy to describe tokenisation as representing an asset on a blockchain. In practice, that is only the visible layer.

Amos Song, Chief Product Officer at DigiFT, suggested thinking about a tokenised product in three parts:

1. The token and the rights it represents. Is the investor holding an interest in a fund, bond, REIT or another security? What economic and legal rights come with it?
2. The legal and governance structure. The relationship between the token holder and the underlying asset must be supported by offering documents, ownership records, service providers and enforceable arrangements.
3. The technology and operating model. Identity, smart contracts, minting and burning, subscriptions, redemptions, distributions and investor communications all need to work as one system.

This is an important distinction. Putting an asset on-chain does not remove the traditional responsibilities attached to issuing and administering a financial product. Tokenisation changes how those responsibilities can be executed—but not the need for them.

2. The bigger opportunity is utility, not liquidity alone

Much of the tokenisation conversation has focused on unlocking liquidity in traditionally illiquid assets. The panel argued that this framing is too narrow.

“Tokenisation isn’t just a liquidity unlock. It’s a utility unlock.” — Amos Song

Liquidity is valuable, but tokenised assets can potentially do more than trade more frequently. They can be transferred, programmed, pledged and integrated into other financial workflows.

The panel discussed practical examples including:

• tokenised money-market funds being used as collateral;
• subscriptions and redemptions supported outside traditional market hours;
• stablecoin-based settlement reducing operational delays;
• lower investment minimums widening access to selected strategies; and
• fractional ownership opening assets to a broader range of eligible investors.

The point is not to add blockchain to an existing product for its own sake. It is to enable an asset to perform functions that would be difficult, slow or expensive within fragmented traditional systems.

3. Regulation is infrastructure

Institutional tokenisation and unbacked cryptoassets are often grouped together because both use tokens. Regulators and investors, however, need to look beyond the format and examine the substance.

For a tokenised security, the underlying asset, issuer, investor rights and applicable regulatory framework should be identifiable. Existing requirements around securities offerings, anti-money-laundering controls, investor protection, cybersecurity and technology governance do not disappear when an asset moves on-chain.

Doreen Fadli of Labuan FSA explained how an activity-based approach can help regulation remain relevant as technology changes. Instead of regulating a label, authorities can examine the activity taking place—such as issuing, listing, trading or exchanging—and apply the appropriate rules and safeguards.

The discussion also highlighted the trade-off regulators must navigate. Too little oversight undermines trust. Excessive or fragmented requirements can make responsible innovation difficult to scale. The most effective frameworks provide clarity and protection while leaving room for new operating models to develop.

Labuan’s work on digital financial services and Shariah-compliant digital assets illustrated another important benefit: tokenisation may improve access to instruments such as sukuk by supporting smaller denominations and more efficient distribution, while retaining the required asset backing and governance.

4. Interoperability is where the real efficiency gains begin

Issuing a token is no longer the hardest part. Making that token useful across institutions, networks and payment systems is the more consequential challenge.

Chee Keong Teo of EY noted that the market has not yet reached a state where tokenised assets are consistently composable and interoperable across venues. Without that connectivity, the industry risks recreating the same silos it set out to remove.

The larger gains emerge when the asset and payment legs can work together: tokenised securities alongside stablecoins or tokenised cash, with settlement occurring as part of the same coordinated transaction. That can reduce settlement time, operational friction and counterparty exposure.

This will require more than technical bridges. The market also needs common standards, compatible compliance models and confidence that rights remain enforceable as assets move between platforms.

5. Success means the technology becomes invisible

The panel repeatedly returned to the end-user experience. Most investors do not choose a product because of the database or settlement architecture underneath it. They care about whether the product is appropriate, well-governed, accessible and capable of delivering its intended financial outcome.

As Amos put it:

“The technology should not matter to the end user. They want a product that is safe, delivers the return they want and is available when they need it.”

The builders, regulators and institutions behind the product must care deeply about the technology. But they should absorb that complexity rather than passing it to the user.

This is how many foundational technologies achieve mass adoption. Users rarely think about the protocols that allow a message to arrive instantly or a mobile payment to settle. On-chain finance will mature in the same way: not when every user understands tokenisation, but when tokenised products simply provide a better experience.

What needs to happen next

The panel pointed to five priorities for the next stage of adoption:

1. Clear and proportionate regulation that distinguishes between different assets, activities and risk profiles.
2. Robust legal structures connecting each token to enforceable rights in the underlying asset.
3. Interoperable infrastructure spanning platforms, institutions, custody arrangements and payment rails.
4. Institutional-grade operations covering identity, compliance, cybersecurity, settlement and asset servicing.
5. Products built around user value, with technology serving as the enabler rather than the selling point.

From tokenisation to an open financial system

Tokenisation has progressed from experimentation to real-world implementation, but scale will not come from token issuance alone. It will come from useful assets moving through trusted infrastructure, supported by clear rights and connected to the wider financial system.

At DigiFT, this is the future we are building towards: bringing regulated financial products on-chain to help create a more open, efficient and unified financial system.

Real finance, meet the open economy.

Disclaimer: DigiFT and/or its affiliates endeavour to ensure the accuracy and reliability of the information provided, but do not guarantee its accuracy or reliability, and accept no liability (whether in tort, contract, or otherwise) for any loss or damage arising from any inaccuracy or omission, or from any decision, action, or non-action based on or in reliance upon the information contained in this material.

This information does not constitute an invitation, recommendation, or offer to subscribe for, purchase, or enter into any transaction involving the above-mentioned product/service or any other services mentioned. The above-mentioned product/service is only available to Accredited Investors, Professional Investors, and Institutional Investors through authorised regulated intermediaries.

Before making any investment decision, please seek independent legal and financial advice. Clients intending to trade this product are reminded of the risks associated with such products and should carefully assess their investment objectives, risk appetite, financial situation, and particular needs before making any investment decision.

This content is for general informational purposes only and does not constitute investment advice, an offer, or a solicitation to buy or sell any product or service. Eligibility to access or invest in any products mentioned is subject to applicable laws and investor qualification requirements. DigiFT products and services are available only through authorised and regulated intermediaries to eligible investors. Readers should seek independent legal, financial, and tax advice before making any investment decision. This announcement has not been reviewed by the Monetary Authority of Singapore.