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Tokenisation alone is not enough
Feb 2026
Rico van der Veen, co-founder and CEO at SemiLiquid Labs, considers that while tokenisation has improved asset mobility and transparency, the real constraint on institutional scale lies in outdated credit rails
Image: SemiLiquid Labs
Tokenisation has made assets more mobile, transparent, and programmable. Unlocking its full economic potential, however, depends less on creating parallel financial systems and more on upgrading the credit infrastructure that connects tokenised assets to institutional capital markets — particularly secured credit execution and enforcement rails.
The past two years have marked a structural shift from tokenisation pilots to production deployment. Global financial institutions including Franklin Templeton and leading custodians have committed to tokenised funds, deposits, and securities as part of their core infrastructure strategy. As institutional adoption accelerates, the tokenised asset market is projected to exceed US$10 trillion by 2030. Despite this progress, most tokenised assets remain operationally underutilised. Today, they are primarily used to improve internal settlement and operational efficiency, while broader capital market utility remains limited. Investors and institutions often hold tokenised assets as balance-sheet representations rather than actively deploying them as productive collateral within credit markets.
For tokenised markets to scale, infrastructure must evolve beyond asset issuance and settlement. The next phase requires standardised, custody-native credit rails that integrate directly with existing collateral management, risk systems, and regulatory frameworks. This includes interoperable credit messaging, deterministic enforcement workflows, and consistent operational standards across both traditional and tokenised markets.
Removing the manual bottlenecks of tokenised markets
As an emerging sector, tokenised markets remain governed by traditional securities legislation. This also means that they are subjected to the bottlenecks that have long plagued traditional finance. For instance, up to 70 per cent of bilateral credit is still stalled by manual legacy workflows. Each transaction requires bespoke paperwork, takes an average of six weeks to set up, and incurs roughly US$150,000 in legal, compliance, and operational fees.
This lengthy process is counterintuitive to the smart contract logic of tokenisation. Instead of relying on incremental infrastructure upgrades or a full overhaul, adding a separate infrastructure layer that changes asset movement would be more effective. A promising approach would be a messaging infrastructure that allows institutions to request and receive credit on tokenised assets without moving collateral out of custody. By keeping tokenised assets within their custodian environment throughout the credit lifecycle, cross-system movements and the associated counterparty risks are eliminated.
Working inside financial infrastructure rather than around it
Another barrier to achieving credit on tokenised assets is its incompatibility with traditional financial systems, which govern core activities such as collateral management, structured products, and risk-controlled reuse. As digital assets are alternative financial products designed to operate in a less regulated environment, their structural and operational properties do not align with the rights and risk-adjusted approach that the broader financial system demands. As institutions bring liquidity and years of experience to the digital asset space, their participation becomes a key contributor to the sector’s maturity.
Institutional investors are well aware of the advantages that tokenisation brings, and are more concerned about how onchain assets are regulated and implemented sustainably for their sizable transactions. To meet its most aligned user base where they are, tokenised credit needs infrastructure that connects and adapts to the traditional finance ecosystem rather than bypasses it. To achieve this, the infrastructure needs to include institutional-grade features such as standardised messaging, enforceable controls, and integration into custody and risk systems. Such capabilities would broaden the real-world applications of tokenised assets.
Regulatory standardisation will unlock credit markets for tokenised assets
Finally, the adoption of tokenised assets also benefits from regulatory frameworks that account for the distinct characteristics and market dynamics of digital assets. This is especially the case for onchain assets used by centralised entities, which sit somewhere in between the secure, regulated environment of traditional finance and the programmable flexibility of decentralised finance.
With cross-border flows being a dominant use case, one area where regulation of tokenised credit can have a significant impact is legal standardisation. Multi-party legal contracts between borrowers, lenders, and custodians are common practice to ensure enforceability, but idiosyncrasies across jurisdictions remain a challenge. Local regulators can ease this process by endorsing or providing standardised legal templates, which would significantly build investor confidence and support wider adoption.
From pilot to scaled activation
Tokenisation has solved asset mobility. But scalability depends on activating those assets within real credit markets. Technology alone is not enough. Progress requires infrastructure that aligns with existing financial systems, supports enforceable credit relationships, and operates within clear regulatory frameworks. If these gaps are addressed, credit markets for tokenised assets can move from promise to practice — reshaping finance into a more efficient, scalable, and inclusive system.
The past two years have marked a structural shift from tokenisation pilots to production deployment. Global financial institutions including Franklin Templeton and leading custodians have committed to tokenised funds, deposits, and securities as part of their core infrastructure strategy. As institutional adoption accelerates, the tokenised asset market is projected to exceed US$10 trillion by 2030. Despite this progress, most tokenised assets remain operationally underutilised. Today, they are primarily used to improve internal settlement and operational efficiency, while broader capital market utility remains limited. Investors and institutions often hold tokenised assets as balance-sheet representations rather than actively deploying them as productive collateral within credit markets.
For tokenised markets to scale, infrastructure must evolve beyond asset issuance and settlement. The next phase requires standardised, custody-native credit rails that integrate directly with existing collateral management, risk systems, and regulatory frameworks. This includes interoperable credit messaging, deterministic enforcement workflows, and consistent operational standards across both traditional and tokenised markets.
Removing the manual bottlenecks of tokenised markets
As an emerging sector, tokenised markets remain governed by traditional securities legislation. This also means that they are subjected to the bottlenecks that have long plagued traditional finance. For instance, up to 70 per cent of bilateral credit is still stalled by manual legacy workflows. Each transaction requires bespoke paperwork, takes an average of six weeks to set up, and incurs roughly US$150,000 in legal, compliance, and operational fees.
This lengthy process is counterintuitive to the smart contract logic of tokenisation. Instead of relying on incremental infrastructure upgrades or a full overhaul, adding a separate infrastructure layer that changes asset movement would be more effective. A promising approach would be a messaging infrastructure that allows institutions to request and receive credit on tokenised assets without moving collateral out of custody. By keeping tokenised assets within their custodian environment throughout the credit lifecycle, cross-system movements and the associated counterparty risks are eliminated.
Working inside financial infrastructure rather than around it
Another barrier to achieving credit on tokenised assets is its incompatibility with traditional financial systems, which govern core activities such as collateral management, structured products, and risk-controlled reuse. As digital assets are alternative financial products designed to operate in a less regulated environment, their structural and operational properties do not align with the rights and risk-adjusted approach that the broader financial system demands. As institutions bring liquidity and years of experience to the digital asset space, their participation becomes a key contributor to the sector’s maturity.
Institutional investors are well aware of the advantages that tokenisation brings, and are more concerned about how onchain assets are regulated and implemented sustainably for their sizable transactions. To meet its most aligned user base where they are, tokenised credit needs infrastructure that connects and adapts to the traditional finance ecosystem rather than bypasses it. To achieve this, the infrastructure needs to include institutional-grade features such as standardised messaging, enforceable controls, and integration into custody and risk systems. Such capabilities would broaden the real-world applications of tokenised assets.
Regulatory standardisation will unlock credit markets for tokenised assets
Finally, the adoption of tokenised assets also benefits from regulatory frameworks that account for the distinct characteristics and market dynamics of digital assets. This is especially the case for onchain assets used by centralised entities, which sit somewhere in between the secure, regulated environment of traditional finance and the programmable flexibility of decentralised finance.
With cross-border flows being a dominant use case, one area where regulation of tokenised credit can have a significant impact is legal standardisation. Multi-party legal contracts between borrowers, lenders, and custodians are common practice to ensure enforceability, but idiosyncrasies across jurisdictions remain a challenge. Local regulators can ease this process by endorsing or providing standardised legal templates, which would significantly build investor confidence and support wider adoption.
From pilot to scaled activation
Tokenisation has solved asset mobility. But scalability depends on activating those assets within real credit markets. Technology alone is not enough. Progress requires infrastructure that aligns with existing financial systems, supports enforceable credit relationships, and operates within clear regulatory frameworks. If these gaps are addressed, credit markets for tokenised assets can move from promise to practice — reshaping finance into a more efficient, scalable, and inclusive system.
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