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CASLA: Tokenisation’s future in securities finance
Jun 2026
With tokenisation transitioning out of pilot phases and into production, a group of digital asset and financial experts at the Canadian Securities Lending Association explore how digital rails for collateral, cash, and securities are starting to reconfigure securities finance, and the key facets that will determine how fast these rails can carry real volume
Image: f11photo/stock.adobe.com
At the most recent iteration of the Canadian Securities Lending Association (CASLA) conference in Canada, a panel of experts discussed tokenisation’s role in the securities finance market and beyond.
The speakers — Will Babcock, director of structured products, banking, at Cantor Fitzgerald, Cale Newhouse, product manager at Bank of New York, Fabrice Tomenko, head of digital trust at Clearstream, and Robert Cousart, US head of product and platform, cash management at BlackRock — delved into the real-world applications of tokenisation.
The session — moderated by Claire Van Wyk-Allan, director of business development, prime brokerage at TD Securities — offered the audience insight into how tokenisation has transitioned from concept to practical infrastructure for institutional markets.
Tokenisation, in essence, is the modernisation of the operational rails behind the assets, and within the discussion, the panellists set out to answer a simple but multi-faceted question: why does it matter?
The benefits
For Babcock, a key benefit of tokenisation is connecting onchain liquidity with yield-bearing structured and fixed income products, utilising DeFi as more efficient funding for credit. The majority of stablecoins, he says, are “zero per cent yield-bearing, and if you look on the traditional finance side of the world, that doesn’t really happen”.
Tomenko shares this perspective. He underscores the significance of risk and inefficiency in cross-border securities lending and collateral, viewing tokenisation as a mechanism to “solve these problems” through its ability to “represent the ownership of securities on a platform which can change its ownership 24/7”. Notably, he adds that tokenisation has the potential to alleviate exposure during cross-border swaps and tight intraday margining.
Cousart, in keeping with his area of expertise, views tokenisation through the lens of cash management and corporate payments. Corporations are moving money around within a plethora of different sub-accounts, which he describes as a “manual process” involving “lots of reconciliation”.
Distributed ledger technology (DLT), and the assets that it enables — specifically stablecoins — have the potential to automate time-consuming processes and improve efficiency.
He also sheds light on the uptake in the number of firms bringing public funds to market and utilising tokenisation technology — including BlackRock, J.P. Morgan, Fidelity, Wisdom Tree, and Franklin Templeton — implying that the industry recognises its potential value.
“24/7 Settlement” and Tokenisation, says Newhouse, may improve the extreme settlement concentration that occurs within the “first 30 minutes of a trading day” in US Treasuries. He believes that both TradFi and DeFi interoperability enhancements are needed to achieve genuine always-on markets, and that “tokenised assets are particularly well suited for” this fundamental upgrade. The relatively small US Treasury settlement window of today forces decision-makers to plan the next 24 hours — “a long time” in today’s financial markets.
This concentrated settlement forces banks into a position where they must pre-fund cash and, in essence, hold it on their balance sheets. An incremental improvement in efficiency, driven by tokenisation, would act as a net benefit to institutions operating within these windows.
DeFi markets
The emergence and evolution of onchain markets have fostered an open-source lending environment that is more capital efficient than its TradFi counterpart. Babcock highlights the fact that a BBB-rated security can be bought and potentially pledged to DeFi lending protocols — such as Aave — effectively repo financing onchain.
The combination of programmable liquidation and deep onchain liquidity has changed investors’ perception of collateral risk when compared to some traditional assets.
Cousart sees smart contracts as a “walled garden” where tokens can “only be sent to certain digital wallets that are onboarded to that product”. The limited movement of tokens presents itself as a compelling factor for institutional buyers and fund boards evaluating the tokenised shared class.
The challenges
As is the way with emerging technologies, tokenisation’s first great hurdle is education. Cousart highlights the importance of having leadership teams on board with what is being done with tokenisation, ensuring that the technology is understood before initiatives are launched. “You can’t just start developing the technology without answering to someone,” he says.
Babcock shares this sentiment, adding that people on the DeFi side of things don’t always share the same kind of level of expertise as someone from a TradFi-native firm, particularly when it comes to bespoke financial products.
With the infrastructure and underwriting differing between the two, and the challenges stemming from that discrepancy, education becomes a key facet in advancing the scope of the technology.
The adoption of tokenisation is subject to the scrutiny of product acceptance and implementation processes. Tomenko notes that, for tokenisation to be onboarded within a firm, it must go through risk, legal, technical, cybersecurity, and operational teams, which “can take a couple of months to two years”. He sheds light on the fact that, when firms bring in operational teams later in the approval cycle, the time frame for scalability becomes much longer.
Tomenko warns that the disparity between supply and demand volume, with “many more early adopters on the demand side”, does not allow tokenisation to transition from its de facto pilot phase, and firms do not end up benefiting from the full scale of efficiency, risk, and speed that they were anticipating.
Interoperability acting as a blockade to the widespread adoption of tokenisation was a shared sentiment among the panel.
Not only do different DLT platforms have to be compatible with one another, but they must also function in tandem with legacy infrastructure to avoid siloed, fragmented liquidity.
Regulation
The emergence of tokenisation presents an opportunity to take advantage of its theoretical benefits through regional regulatory frameworks. The US, through its GENIUS Act, intends to solidify its position as market leader by providing onchain cash with the necessary legal clarity and providing it with its own regulatory classification, ensuring institutions are not violating securities laws. It has also explicitly permitted banks to issue tokenised deposits and circumnavigate the operational limitations associated with a regular deposit.
The UK, meanwhile, has been testing use cases for digital gilts through its pilot programme and has a clear roadmap for tokenised assets and the adoption of digital technology. The unified thinking between the Bank of England, Financial Conduct Authority, and Prudential Regulatory Authority presents itself as a compelling reason to select the region as a hub for future tokenisation projects, quelling fears of fragmented regulatory policy.
Conversely, the EU has taken a different approach to tokenisation, in that, unlike the US, it has chosen to regulate first, innovate later. Who can use the assets, how they are qualified, and who can issue them are all things that it views as necessary to establish before proceeding. This, in the view of the panellists, places the EU behind the US, allowing US dollar-pegged stablecoins to assert themselves as a dominant market force. However, the European Central Bank’s central bank digital currency (CBDC) use case experiments have positioned it to benefit from the technology’s advantageous avenues, such as sharper intraday liquidity control and lower systemic risk by processing repo transactions within the day using CBDCs as the cash leg, and tokenised securities on the other side.
For APAC, each country has its own distinct regulations, with Hong Kong and Singapore providing the greatest legal clarity. The lack of a general consensus means it functions as a double-edged sword: asset managers maintain reservations about expanding into the region due to the regulatory inconsistency, while simultaneously acknowledging the beneficial ability to experiment with tokenisation on a nation-to-nation basis.
Canada has seen the Canadian Securities Administrators approach tokenisation in a similar manner to its existing securities regulation, noted Van Wyk-Allan. Classifications of many crypto or tokenised assets are the same as their securities or derivatives counterparts, with normal securities-law levers often applied surrounding custody, client asset segregation, and risk management.
Alongside this, the Office of the Superintendent of Financial Institutions has consulted on how banks and insurers need to be treating crypto and tokenised exposures on their balance sheets, with the Bank of Canada working towards a more formal regulatory regime for Canadian dollar-pegged stablecoins. When combined, this is an attractive package for securities finance teams looking to experiment with tokenisation on rails and a regulatory territory that is broadly familiar to them.
The future
In the near future, the panellists anticipate tokenisation to move away from the proof of concept phase, and into one of real-world application and integration. They predict that, for the foreseeable future, tokenised assets will live “side by side” with TradFi assets and technology, along with an increase in use cases stemming from the support of central banks and governments in promoting the usage of CBDCs.
The aforementioned increase in education is, in theory, going to lead to an evolution of the payments ecosystem. As leadership teams and executives learn what the technology has to offer, the scale of application will increase. The stablecoin market, for example, currently valued at approximately US$300 billion, did not exist just a few years ago, and is projected to reach US$2 trillion in the coming four years, according to certain studies noted by Cousart — demonstrating the potential for widespread adoption and promising returns.
Closing thoughts
Ultimately, the discussion at CASLA suggests that tokenisation’s future in securities finance will be defined by the rewiring of market infrastructure, away from the constraints of frantic 30-minute settlement windows, the atomic movement of collateral, coexisting TradFi and DeFi cash fund shares, and characterised by a regulatory shift.
Yet the panellists were fundamentally clear in that, without the less glamorous, but necessary, work of education, governance, interoperability, and consistent, clear legal frameworks, the scale they anticipate can not be facilitated.
The speakers — Will Babcock, director of structured products, banking, at Cantor Fitzgerald, Cale Newhouse, product manager at Bank of New York, Fabrice Tomenko, head of digital trust at Clearstream, and Robert Cousart, US head of product and platform, cash management at BlackRock — delved into the real-world applications of tokenisation.
The session — moderated by Claire Van Wyk-Allan, director of business development, prime brokerage at TD Securities — offered the audience insight into how tokenisation has transitioned from concept to practical infrastructure for institutional markets.
Tokenisation, in essence, is the modernisation of the operational rails behind the assets, and within the discussion, the panellists set out to answer a simple but multi-faceted question: why does it matter?
The benefits
For Babcock, a key benefit of tokenisation is connecting onchain liquidity with yield-bearing structured and fixed income products, utilising DeFi as more efficient funding for credit. The majority of stablecoins, he says, are “zero per cent yield-bearing, and if you look on the traditional finance side of the world, that doesn’t really happen”.
Tomenko shares this perspective. He underscores the significance of risk and inefficiency in cross-border securities lending and collateral, viewing tokenisation as a mechanism to “solve these problems” through its ability to “represent the ownership of securities on a platform which can change its ownership 24/7”. Notably, he adds that tokenisation has the potential to alleviate exposure during cross-border swaps and tight intraday margining.
Cousart, in keeping with his area of expertise, views tokenisation through the lens of cash management and corporate payments. Corporations are moving money around within a plethora of different sub-accounts, which he describes as a “manual process” involving “lots of reconciliation”.
Distributed ledger technology (DLT), and the assets that it enables — specifically stablecoins — have the potential to automate time-consuming processes and improve efficiency.
He also sheds light on the uptake in the number of firms bringing public funds to market and utilising tokenisation technology — including BlackRock, J.P. Morgan, Fidelity, Wisdom Tree, and Franklin Templeton — implying that the industry recognises its potential value.
“24/7 Settlement” and Tokenisation, says Newhouse, may improve the extreme settlement concentration that occurs within the “first 30 minutes of a trading day” in US Treasuries. He believes that both TradFi and DeFi interoperability enhancements are needed to achieve genuine always-on markets, and that “tokenised assets are particularly well suited for” this fundamental upgrade. The relatively small US Treasury settlement window of today forces decision-makers to plan the next 24 hours — “a long time” in today’s financial markets.
This concentrated settlement forces banks into a position where they must pre-fund cash and, in essence, hold it on their balance sheets. An incremental improvement in efficiency, driven by tokenisation, would act as a net benefit to institutions operating within these windows.
DeFi markets
The emergence and evolution of onchain markets have fostered an open-source lending environment that is more capital efficient than its TradFi counterpart. Babcock highlights the fact that a BBB-rated security can be bought and potentially pledged to DeFi lending protocols — such as Aave — effectively repo financing onchain.
The combination of programmable liquidation and deep onchain liquidity has changed investors’ perception of collateral risk when compared to some traditional assets.
Cousart sees smart contracts as a “walled garden” where tokens can “only be sent to certain digital wallets that are onboarded to that product”. The limited movement of tokens presents itself as a compelling factor for institutional buyers and fund boards evaluating the tokenised shared class.
The challenges
As is the way with emerging technologies, tokenisation’s first great hurdle is education. Cousart highlights the importance of having leadership teams on board with what is being done with tokenisation, ensuring that the technology is understood before initiatives are launched. “You can’t just start developing the technology without answering to someone,” he says.
Babcock shares this sentiment, adding that people on the DeFi side of things don’t always share the same kind of level of expertise as someone from a TradFi-native firm, particularly when it comes to bespoke financial products.
With the infrastructure and underwriting differing between the two, and the challenges stemming from that discrepancy, education becomes a key facet in advancing the scope of the technology.
The adoption of tokenisation is subject to the scrutiny of product acceptance and implementation processes. Tomenko notes that, for tokenisation to be onboarded within a firm, it must go through risk, legal, technical, cybersecurity, and operational teams, which “can take a couple of months to two years”. He sheds light on the fact that, when firms bring in operational teams later in the approval cycle, the time frame for scalability becomes much longer.
Tomenko warns that the disparity between supply and demand volume, with “many more early adopters on the demand side”, does not allow tokenisation to transition from its de facto pilot phase, and firms do not end up benefiting from the full scale of efficiency, risk, and speed that they were anticipating.
Interoperability acting as a blockade to the widespread adoption of tokenisation was a shared sentiment among the panel.
Not only do different DLT platforms have to be compatible with one another, but they must also function in tandem with legacy infrastructure to avoid siloed, fragmented liquidity.
Regulation
The emergence of tokenisation presents an opportunity to take advantage of its theoretical benefits through regional regulatory frameworks. The US, through its GENIUS Act, intends to solidify its position as market leader by providing onchain cash with the necessary legal clarity and providing it with its own regulatory classification, ensuring institutions are not violating securities laws. It has also explicitly permitted banks to issue tokenised deposits and circumnavigate the operational limitations associated with a regular deposit.
The UK, meanwhile, has been testing use cases for digital gilts through its pilot programme and has a clear roadmap for tokenised assets and the adoption of digital technology. The unified thinking between the Bank of England, Financial Conduct Authority, and Prudential Regulatory Authority presents itself as a compelling reason to select the region as a hub for future tokenisation projects, quelling fears of fragmented regulatory policy.
Conversely, the EU has taken a different approach to tokenisation, in that, unlike the US, it has chosen to regulate first, innovate later. Who can use the assets, how they are qualified, and who can issue them are all things that it views as necessary to establish before proceeding. This, in the view of the panellists, places the EU behind the US, allowing US dollar-pegged stablecoins to assert themselves as a dominant market force. However, the European Central Bank’s central bank digital currency (CBDC) use case experiments have positioned it to benefit from the technology’s advantageous avenues, such as sharper intraday liquidity control and lower systemic risk by processing repo transactions within the day using CBDCs as the cash leg, and tokenised securities on the other side.
For APAC, each country has its own distinct regulations, with Hong Kong and Singapore providing the greatest legal clarity. The lack of a general consensus means it functions as a double-edged sword: asset managers maintain reservations about expanding into the region due to the regulatory inconsistency, while simultaneously acknowledging the beneficial ability to experiment with tokenisation on a nation-to-nation basis.
Canada has seen the Canadian Securities Administrators approach tokenisation in a similar manner to its existing securities regulation, noted Van Wyk-Allan. Classifications of many crypto or tokenised assets are the same as their securities or derivatives counterparts, with normal securities-law levers often applied surrounding custody, client asset segregation, and risk management.
Alongside this, the Office of the Superintendent of Financial Institutions has consulted on how banks and insurers need to be treating crypto and tokenised exposures on their balance sheets, with the Bank of Canada working towards a more formal regulatory regime for Canadian dollar-pegged stablecoins. When combined, this is an attractive package for securities finance teams looking to experiment with tokenisation on rails and a regulatory territory that is broadly familiar to them.
The future
In the near future, the panellists anticipate tokenisation to move away from the proof of concept phase, and into one of real-world application and integration. They predict that, for the foreseeable future, tokenised assets will live “side by side” with TradFi assets and technology, along with an increase in use cases stemming from the support of central banks and governments in promoting the usage of CBDCs.
The aforementioned increase in education is, in theory, going to lead to an evolution of the payments ecosystem. As leadership teams and executives learn what the technology has to offer, the scale of application will increase. The stablecoin market, for example, currently valued at approximately US$300 billion, did not exist just a few years ago, and is projected to reach US$2 trillion in the coming four years, according to certain studies noted by Cousart — demonstrating the potential for widespread adoption and promising returns.
Closing thoughts
Ultimately, the discussion at CASLA suggests that tokenisation’s future in securities finance will be defined by the rewiring of market infrastructure, away from the constraints of frantic 30-minute settlement windows, the atomic movement of collateral, coexisting TradFi and DeFi cash fund shares, and characterised by a regulatory shift.
Yet the panellists were fundamentally clear in that, without the less glamorous, but necessary, work of education, governance, interoperability, and consistent, clear legal frameworks, the scale they anticipate can not be facilitated.
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