The challenges of tokenisation

Standardisation_‍

There are hundreds of blockchains such as Ethereum, Solana or Tezos. The problem is that an asset tokenised on one blockchain is now difficult to transfer to another. The technology is evolving and interoperability is improving, but it is still important to choose the right blockchain to get started. Given its age, security and the size of its community, Ethereum (along with its secondary layers) is a firm favourite. 

‍Security_‍

The blockchain is often touted for its security, but it is not immune to hacking. Securing tokenised assets is still a real issue. 

Regulation_‍

Companies need to ensure that they comply with financial regulations, which can be complex given that tokenisation is a new technology and regulatory frameworks are not yet fully defined in many countries. 

Markets_‍

As tokenisation regulation is very recent (2023), there is not yet an established marketplace to allow tokenised assets to be easily traded. Within the EU, Euronext and Euroclear have positioned themselves, as has Deutsche Börse. In the UK, the London Stock Exchange Group has unveiled its ambitions. Among non-European players, ADDX (Singapore) and Polymath (Canada) are among the most advanced. 

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