The next test for tokenization may not be whether assets can be issued on a blockchain, but whether they can be relied on when markets turn volatile.
Tokenized assets need reliable settlement, enforceable ownership rights and practical collateral use before institutions can adopt them at scale, according to Edwin Mata, CEO and co-founder of Brickken.
“The latest developments in tokenization point to a more demanding phase for financial infrastructure. Regulators are examining whether tokenized assets can function as collateral, settle reliably and retain their legal protections when markets come under pressure,” Mata said in remarks shared with Crypto Briefing.
As tokenization gains traction, regulators are turning their attention to what happens after an asset is issued on-chain.
The European Securities and Markets Authority, the EU’s top markets watchdog, is consulting on whether tokenized assets can qualify as collateral in the region’s clearing infrastructure. Meanwhile, Singapore’s central bank is advancing its own digital settlement initiatives.
Mata said institutions must be able to trust ownership records, settlement finality and the resilience of the systems handling these assets. Issuers also need to ensure tokenized assets can move across platforms and financial systems without weakening legal protections or restricting liquidity.
“I think financial institutions will increasingly choose settlement arrangements based on the asset, transaction size and liquidity requirements. For issuers, supporting different payment mechanisms while maintaining accurate ownership records will become important as tokenized securities enter more markets,” Mata explained.
“Settlement infrastructure could become a greater focus of institutional investment over the next few years. Financial institutions will want to know how payment and asset transfers are coordinated, when settlement becomes legally final and what happens if either side of the transaction cannot be completed,” he added.
The International Monetary Fund has separately examined how tokenization and connected digital infrastructure could affect financial stability. According to Mata, automated transactions may create new liquidity risks if changes in asset valuations trigger simultaneous collateral movements across institutions.
The reliability of custodians, settlement providers and other infrastructure operators will also matter when transactions fail or systems become unavailable.
Mata said institutional adoption will depend on whether tokenized assets can be managed consistently throughout their lifecycle, with enforceable ownership, reliable settlement, sufficient liquidity and operational resilience.
“Over the next twelve months, institutional adoption will increasingly depend on how effectively tokenized assets can be held, transferred and settled across different financial systems,” he said.
Disclosure: This article was edited by Kaye Quema. For more information on how we create and review content, see our Editorial Policy.