Tokenisation has taken off as a frequent talking point in financial services. Most of the hype surrounds digital asset tokenisation related to Web3 activities and the use of blockchain as a trust layer. However, many in the more traditional space are looking at the ability to turn real-world and traditional financial assets such as bonds, loans or mortgages into a digital token traded on the blockchain or distributed ledger to simplify settlement.
In general, tokenisation is the process of issuing a digital, unique and anonymous representation of a real thing, such as when sensitive data is attached to an element as a token for security purposes. For example, when most people use a credit or debit card for payment at a merchant, the point of sale is not receiving the customer’s account details directly, but instead receiving a token, protected by cryptography, for security.
