Trust, regulatory clarity and interoperability essential for tokenisation to scale - FIX Summit

Speaking at the FIX Trading Summit in Hong Kong on Thursday, panellists explored the innovations and benefits around tokenisation and barriers that need to be overcome for further adoption.

From Nasdaq's launch of tokenised securities to DTCC's tokenised securities trading platform, it's evident that decentralised finance (DeFi) and traditional finance (TradFi) are gradually converging, with tokenisation being a bridge connecting both worlds.

Tokenisation's benefits are broad, including improving collateral movement and liquidity as well as efficiency and cost savings.

Beatriz Callaghan, director and APAC lead for Digital Asset, the creator of the privacy enabled public blockchain Canton Network, reflected on its rapid adoption and how it has created a "network of networks".

To further scale out use cases of tokenisation, Callaghan believes that "interoperability is a deciding factor".

"With differing time zones across global markets that can be felt in Asia, the near-instantaneous, atomic settlement provided on Canton is of particular importance as the tokenisation of assets can unlock a significant amount of liquidity and collateral mobility," said Callaghan.

R.G. Manalac, head of Asia-Pacific financial technology, Nasdaq, believes the tokenisation journey will be a convergence of new and existing infrastructure and want to ensure interoperability with the whole ecosystem.

"We want to ensure we maintain the trust and integrity we have built with market participants over the years as we enter this new age of capital markets," said Manalac.

He added: “Lack of trust and transparency can be a major barrier to adoption of tokenisation. By working with key players like DTCC and Digital Asset to build the right rails around the system and prove that tokenised assets can work in similar way as today’s capital markets, I think we’ll start to get more participants involved.”

Praveen Dosodia, co-founder and chief architect, Solidus Labs, said that as the shift in focus to retail participation takes place, tokenisation has a key role to unlock opportunities.

"TradFi institutions that sat on the sidelines are now exposing customers to digital assets and with the growth of retirement accounts and digital asset regulatory friendliness in the US, the opportunities are enormous," he said.

In the next two years, agentic trading and how tokenised assets interact with the rest of the market infrastructure will be key to watch.

Andy Lee, partner, HashKey Tokenisation, said that the biggest benefit of tokenisation is access to tokenised securities, especially for those holding stablecoins and want access to securities on a 24/7 basis, as well as operational efficiency.

For HashKey, a key consideration for where it turns to for tokenisation growth opportunities is which jurisdiction gives the best clarity and access. Hong Kong and the US are top of the list.

"Hong Kong is one of the jurisdictions that's given the clearest legal legislation in digital assets as is the US, which is in the process of passing the CLARITY Act," said Lee.

In addition to tokenised asset trading, he believes that the biggest unlock will be finding further use cases for tokenised assets, such as using them as collateral in exchange trading or in onchain vaults.

More than three-quarters of North American firms expect to see their businesses significantly impacted by tokenisation, a new survey from Nasdaq and ValueExchange concluded.

Collateral management is emerging as the most compelling use case for tokenisation in derivatives markets, as firms seek to improve capital efficiency and reduce operational friction.