A new report by the International Organization of Securities Commissions (IOSCO) shows that financial-asset tokenisation continues to develop at a measured pace, with only small pockets of commercial use. The Tokenization of Financial Assets report, published in November 2025 by IOSCO’s Fintech Task Force (FTF) and its Financial Asset Tokenization Working Group (TWG), assesses how distributed ledger technology (DLT) is being applied across the capital markets and what it means for market integrity and investor protection.
According to IOSCO, tokenisation is influencing issuance and distribution more than secondary trading, clearing, or settlement. While DLT-based systems can enable faster settlement, most participants still rely on conventional post-trade infrastructure. Market participants reportedly prefer established systems because of greater familiarity, network effects, and concerns about operational or cyber vulnerabilities in new DLT environments.
In asset servicing, IOSCO points to some early implementations of digital custody and improved collateral mobility, such as intraday repo transactions, but notes that scalability is limited by a lack of credible settlement assets and interoperability between blockchains.
Risks are familiar, but their form changes
IOSCO concludes that most risks in today’s tokenisation projects fall within existing categories already known to regulators and market participants. However, certain vulnerabilities linked to the technology itself, may require additional safeguards. These include uncertainties over legal ownership rights, operational risks such as smart-contract bugs or data leakage, and the danger of cyberattacks on blockchain nodes.
The report also warns that as tokenisation expands, shared DLT networks could increase dependencies among market participants, amplifying contagion risk. IOSCO notes early signs of interlinkage between tokenised assets and crypto markets, including the use of tokenised money market funds as reserve assets for stablecoins or as collateral in crypto-related transactions.
Regulators apply existing frameworks
Regulators are taking a range of approaches, IOSCO finds. Some have applied existing securities-market rules to tokenised assets, while others have introduced guidance, sandbox regimes, or new legislation. IOSCO reiterates that its regulatory principles are technology-neutral and that existing frameworks can also guide oversight of tokenisation.
IOSCO’s final assessment is that tokenisation remains small in scale but is likely to grow unevenly across asset classes. Fixed-income products and money-market funds lead current experimentation, while secondary trading and large-scale post-trade adoption remain limited. For now, market infrastructures and custodians are advised to monitor developments closely as tokenisation continues to test the boundaries of existing post-trade systems.
