Tokenization changes how financial markets work, who participates, and what products we can create. Let’s explore how tokenization is improving the financial market in the WEF report.
Tokenization creates new opportunities by making markets more accessible and efficient for everyone.
Tokenization is changing Market Roles
Traditional financial players—like asset managers, banks, and exchanges—are adapting to tokenization. They’re learning to manage tokenized portfolios, handle digital identity verification, and settle transactions directly on-chain. Let’s break it down:
- Buy- and sell-side firms manage tokenized assets and automate tasks with smart contracts.
- Issuers are raising capital and automating shareholder processes on-chain.
- Exchanges are listing tokenized assets and supporting programmable trading.
- CSDs, custodians, and transfer agents are turning digital, offering everything from token custody to instant corporate actions.
The World Economic Forum (@wef) released a new report on tokenization in financial markets.
The report concludes that tokenization can enhance the efficiency and transparency of financial markets, while giving investors increased access and control over their assets.
It… pic.twitter.com/X3z9qHKwVP
— Chainlink (@chainlink) May 21, 2025
At the same time, new roles are emerging:
- On-chain identity providers.
- Smart contract auditors.
- Interoperability specialists.
- Key management and node operators.
These “digital-native” service providers are crucial for keeping tokenized markets secure, connected, and compliant.
New Products, New Possibilities
One of the most exciting parts of tokenization is the new financial products it makes possible.
Tokenization is more than just a payment trend — it’s a fundamental shift in how we think about value. Brandon Trollip, VP of Global Partnerships at Mastercard, highlights how tokenization is unlocking new potential across the commerce ecosystem. From gateway tokens to network pic.twitter.com/GFT99iO2Ll
— FF News | Fintech Finance (@fintechf) May 22, 2025
Imagine:
- Flash loans are risk-free and settled in seconds.
- Smart funding that converts assets to optimize liquidity and flexibility.
- Assets are programmed to know when and how to trade to improve efficiency and liquidity.
This is more than innovation; it’s a whole new toolbox for modern finance.
Tech Choices That Matter
There are two main paths:
- Permissioned ledgers (used by banks and institutions) give more control but are less open.
- Public blockchains (like Ethereum) are transparent and flexible but raise questions about privacy, compliance, and risk.
Blockchains are transparent.
That’s great for trust but terrible in a very critical way.
It means that hackers have all the time in the world to figure out the little mistake you made and take all of your users’ money. pic.twitter.com/96KT3ePGmO
— Phylax Systems (@phylaxsystems) May 15, 2025
Most real-world systems will likely blend both. Another key choice? The type of money used for settlement. That includes:
- Central bank digital currencies (CBDCs).
- Stablecoins backed by fiat.
- Reserve-backed digital currencies.
There’s a growing demand for central bank money on-chain, especially for large institutions.
Markets That Never Sleep?
Tokenized finance supports 24/7 trading, a significant shift from today’s market hours. However, around-the-clock operations bring challenges, especially with regulation, staffing, and risk. Some markets are starting to experiment—like the NYSE extending its trading hours—but fully “always-on” finance is still in its early stages.
Tokenization is just getting started.
While adoption for tokenized US Treasuries has seen tremendous growth, the total opportunity for global equity markets is exponentially larger—in excess of $100T. pic.twitter.com/PjnBMvaUz4
— Ondo Finance (@OndoFinance) March 20, 2025
What Needs to Happen Next
The industry has a lot of work to do to enjoy the benefits of tokenization:
- Cybersecurity has to keep pace with rising threats, from insider attacks to quantum hacks.
- Regulators must maintain financial stability as more value moves on-chain.
Clear regulations are essential, especially globally. There’s progress: Luxembourg and Liechtenstein already have blockchain laws. The US is warming up to digital assets. Hong Kong and the UK are building regulatory sandboxes to test and scale.
Crypto assets are a global opportunity—and the UK has the chance to lead.
At Ripple’s UK Policy Summit last week, industry leaders explored how smart regulation, stablecoins, and tokenization can fuel growth, innovation, and global competition. https://t.co/7NLe5egvM3
— Ripple (@Ripple) April 6, 2025
Conclusion
Tokenization is building a more open and programmable financial system. It’s not about replacing what works—it’s about upgrading it. But real change takes more than just tech. It takes collaboration, regulation, and incentives to bring everyone along. Here is the first part.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted risk tolerance levels of the writer/reviewers, and their risk tolerance may differ from yours. We are not responsible for any losses you may incur due to any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
The post WEF Report: How Tokenization Is Reshaping Finance – Part 2 appeared first on Altcoin Buzz.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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