Beyond the Hype: Tokenisation as a Structuring Opportunity

In times past tokenisation has sat on the fringes of financial services discussions, often associated more with cryptocurrency markets than mainstream investment structures. That is rapidly changing.

At our most recent Funds Focus event, held earlier this month in London, industry leaders from the legal sector, funds, administration and digital asset businesses agreed on one point: tokenisation is no longer a future concept. Institutional adoption is underway and the focus has shifted from whether tokenisation will happen, to how it can be implemented responsibly and at scale.

For private client lawyers, fund structuring specialists, private equity advisers and tax professionals, this evolution presents both opportunity and challenge. While the underlying technology may be new, many of the legal and governance questions are familiar.

A structural shift, not a technology trend

Opening the discussion, our Head of Funds, Elliot Refson, described tokenisation not as another fintech innovation, but as a structural change in how financial markets are organised, accessed and governed.

At its core, tokenisation enables ownership rights and interests in assets to be represented digitally and transferred more efficiently using distributed ledger technology. However, its significance extends beyond digitisation. It has the potential to reshape how assets are distributed, administered and accessed across global markets.

What was particularly striking throughout the discussion was the consensus that the market has moved beyond speculative crypto use cases. Institutional attention is increasingly focussed on tokenised real-world assets, including fund interests, private credit strategies, treasury products, real estate and other alternative investments.

As our keynote speaker, Adam Cichocki from Grant Thornton, observed, tokenisation is following a familiar pattern seen previously in fintech. The question is no longer whether the technology is real; it’s about how the industry adapts and adopts it responsibly. Adam pointed to growing regulatory developments in the US, UK and Europe, alongside increasing activity from banks, asset managers and central banks, as evidence that institutional adoption is already underway.

Why institutions are leaning in

One of the strongest themes to emerge from the panel was that adoption is being driven by commercial benefits rather than by technological novelty.

Ray Dillet from Bitwise highlighted the significant operational efficiencies available through tokenisation. Faster settlement, reduced reconciliation requirements, greater transparency and lower operational costs are attracting attention from institutions across the investment ecosystem.

According to Ray, large banks, asset managers and market infrastructure providers are increasingly viewing tokenisation as an inevitable evolution of existing financial markets, rather than a disruptive alternative.

Kate McKay from TreasurySpring focussed on another important development: utility. Tokenised investment interests have the potential to become more than simply investment holdings. They could be used as collateral in other transactions, while continuing to generate returns, creating new opportunities for liquidity management and capital efficiency.

Meanwhile, Sam Mudie, founder of Savea, highlighted the potential for tokenisation to unlock access to previously illiquid asset classes. Drawing on his experience in wine, collectibles and other alternative assets, he explained how tokenisation can reduce barriers to entry, improve liquidity and create more efficient routes to ownership and transfer.

For private wealth advisers and private equity professionals, these developments raise an important possibility: the democratisation of access to asset classes that have historically been difficult to access, transfer or administer.

Governance remains the differentiator

Despite the excitement surrounding innovation, the discussion repeatedly returned to governance.

Elliot highlighted that while technology can automate processes and distribute functions, accountability cannot disappear. Someone must remain responsible for oversight, decision-making and investor protection.

That message was echoed throughout the panel. As tokenised structures become more sophisticated, institutional participants are increasingly focussed on questions of governance, legal enforceability, operational controls and regulatory oversight.

Suzanne Howe from IQ-EQ noted how dramatically the quality of enquiries has changed over recent years. Early conversations were often exploratory and speculative. Today’s enquiries are typically led by institutional promoters who have already engaged legal advisers, considered regulatory requirements and developed clear implementation plans.

For lawyers advising on tokenised structures, many of the core questions remain familiar. Ownership rights, transfer restrictions, custody arrangements, investor protections, collateral structures and cross-border regulatory considerations continue to sit at the heart of structuring discussions.

The technology may be evolving, but the need for legal certainty remains unchanged.

The private markets opportunity

One particularly interesting discussion centred on private markets.

Despite predictions that tokenisation would rapidly transform private equity, infrastructure and private credit, adoption has been slower than many expected. Panellists suggested this is largely due to complexity, rather than a lack of demand.

Unlike money market funds or treasury products, private market structures involve layers of contractual rights, capital commitments, governance arrangements and transfer restrictions. Replicating these features in a tokenised environment requires careful legal and operational design. Yet this complexity also creates opportunity.

As institutional investors increasingly seek access to private assets, tokenisation may provide a mechanism for improving distribution, transparency and operational efficiency, without fundamentally changing the underlying investment proposition.
For structuring lawyers, this is likely to become one of the most significant areas of development over the coming years.

Jersey’s role in institutional tokenisation

The discussion also explored the characteristics that will distinguish jurisdictions capable of supporting tokenisation activity at scale.

Across the panel, there was broad agreement that success will not be determined by which jurisdiction moves fastest. Instead, it will depend on which jurisdictions can combine innovation with regulatory clarity, legal certainty and institutional credibility.

Jersey’s established alternatives industry, experienced professional services ecosystem and pragmatic regulatory approach were all identified as important strengths. Rather than positioning itself as a purely digital asset jurisdiction, Jersey is seeking to provide a bridge between traditional finance and emerging digital infrastructure.

As several panellists noted, institutions are not looking for regulatory arbitrage. They are looking for certainty.

Looking ahead

Perhaps the most thought-provoking observation came towards the end of the discussion.

Several panellists argued that tokenisation will ultimately succeed not because investors understand blockchain technology, but because they do not need to.

Few users understand the payment infrastructure that powers modern banking. They simply expect payments to work. The same may ultimately be true of tokenisation. Over time, it may become an invisible layer of market infrastructure that delivers faster settlement, greater transparency and more efficient ownership structures without requiring end users to engage with the underlying technology.

For lawyers, tax advisers and structuring specialists, however, understanding the implications will remain critical.

As tokenisation moves from experimentation to implementation, the greatest opportunities are likely to emerge not from the technology itself, but from the legal, governance and structuring frameworks that allow institutions to use it with confidence.

To learn more about tokenisation in Jersey, visit our dedicated hub.