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For many years, distributed ledger technology (DLT) traversed the funds industry as a solution looking for a problem. As the technology has matured, the market has moved from looking at tokenisation as a conceptual panacea to applying it to real use cases.
As a result, investment has increased, as has adoption and development.
“The key question now is not whether tokenisation is interesting but where does it remove friction in real-time workflows,” says Mike Sleightholme, president of Broadridge International and president of its asset management division.
The most compelling use cases are those that improve access, transparency, settlement efficiency, collateral mobility, ownership tracking or servicing.
Significant investment
According to Broadridge’s 2026 Digital Transformation & Next-Gen Technology Study, more than half of firms are now making significant investments in DLT in anticipation of major changes to trade processing and settlement, up from the previous year.
Nevertheless, adoption will likely be gradual and use-case driven, says Sleightholme.
In the near term this means tokenised funds will sit alongside traditional vehicles rather than displacing them. Existing structures such as ETFs and mutual funds will benefit from greater liquidity, improved distribution ecosystems and investor familiarity.
Sleightholme points to two developments over the last 12 months – one specific to Broadridge and another that is market-wide.
The first is the rapid growth of Distributed Ledger Repo (DLR), a platform built on blockchain technology that mobilises government securities. It has become the world’s largest institutional platform for settling tokenised real assets, with an average daily settled volume of close to $400 billion, significantly more than the majority of crypto exchanges.
The second development is the rise of tokenised money market funds (MMFs), which have emerged as alternatives to stablecoins.
The logic is that an MMF is a relatively simple asset class, making it an ideal testing ground for tokenised infrastructure. In addition, it generates yield for the holder, unlike a stablecoin.
“It is also a good way to develop alternative distribution channels,” says Sleightholme.
To date, there has been greater focus on the issuance of tokenised assets, says Sleightholme. But launching a tokenised asset is only part of the process.
As Sleightholme explains, tokenised assets must meet the same standards of oversight and operational resilience as traditional products.
Consequently, firms’ success with tokenisation will be dependent on the readiness of their operating model.
“Firms also need robust infrastructure for transfer agency, books and records, compliance, governance, disclosure, reporting, investor servicing, wallet support and legacy integration.”
Being able to tokenise something is a commoditised process; it is what you do with it that really counts, says Sleightholme, such as selling more product.
“This is why having the right infrastructure is important.”
The pace of adoption will also be influenced by interoperability, regulation and governance.
“If tokenisation is to operate at scale, there needs to be more clarity about the legal frameworks, investor eligibility and KYC/AML requirements.”
Interoperable platforms
There also needs to be more interoperability between different platforms and market structure in general.
“Progress is being made, but firms still need trusted partners who can abstract complexity and support safe adoption,” says Sleightholme.
This is where market participants with experience of market infrastructure will be so important.
“We see tokenisation as part of the broader modernisation of financial markets. Tokenisation should be viewed in the context of larger shifts across the industry – including digital transformation, AI adoption, data-driven decision-making and the need for front-to-back integration.”
There are two schools of thought on the development of tokenisation. Some believe the existing operating model will be replaced wholesale by tokenisation. Others take a more iterative approach, using the technology to enable fractionalisation, real investment, democratising assets, efficient distribution and other incremental improvements to market structure.
Tokenisation may also be a conduit for two macro themes currently shaping the market: the growing interest in private markets and the increased involvement of retail investors.
To date, operational complexity has hindered the ability to distribute private markets more widely to wealth and retail investors. This is where tokenisation can play a role.
By using DLT and fractionalisation, private market operations become cleaner and easier to scale. This enables availability to wider distribution channels.
Whilst tokenisation does not alter the true liquidity or redemption schedule of the underlying asset, it can enable both investor access and asset managers to scale.
“This is a big opportunity for tokenisation,” says Sleightholme.
“The technology is really coming of age. It is now about how you can apply it to have the greatest impact and bring the widest benefits to the market.
“Because it is not just specialist asset managers looking to tokenisation. There are retail investors and pension funds that have been restricted in their investment choices. And tokenisation presents an opportunity to address this imbalance.”
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“Being able to tokenise something is a commoditised process, it is what you do with it that really counts.”
Mike Sleightholme, President at Broadridge International
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