Tokenisation and the V-Bucks Generation Transition

Much has been said about the tokenisation of real-world assets in the context of institutional, private investors and family offices.

The substantial benefits tokenisation offers – enhanced liquidity, reduced costs, improved transparency, increased accessibility and streamlined administrative processes – are all significant for asset managers looking to diversify their fundraising pool, and for investors looking for better access to more diverse asset classes.

But the application of tokenisation represents something far more than that – it is absolutely fundamental in the context of the emerging ‘V-Bucks Generation’.

This younger, digitally-native generation of gamers, investors and entrepreneurs are immersed in technology, and are used to transacting in online currencies, such as Fortnite’s in-game currency V-Bucks.

For a generation that is so acutely focused on technology as a means of addressing complexity and achieving greater efficiencies in all areas of life, tokenisation is a very familiar and central concept, not only in transacting, but in supporting investment, business growth, and in shaping a new culture of working.

And asset managers should take note because the potential is significant – tokenised real-world assets totalled US$13 billion in 2024 (rwa.xyz) and the expectation is that market dynamics will turbocharge these values into the trillions of dollars by 2030. The industry doesn’t only have an opportunity to tap into and cater to the V-Bucks Generation – it needs to be grappling with this transition now, due to a shift in values, attitudes and perspectives.

Tokenisation and other key trends in alternative investing are themes explored in a paper published by Jersey Finance in partnership with IFI Global, earlier this year. The tokenisation and stable coin themes have also been dominating asset management fora in the past year.

There are very good reasons why finance houses, digital innovators and fund domiciles such as Jersey are looking carefully at the application of tokenisation, as the V-Bucks generation are moving towards the centre stage.

First is the familiarity within the e-gaming environment. This next generation of investors are entirely used to using stablecoins in their digital first environment – from meme coins to e-gaming tokens and transacting in virtual cash.

The concept of tokenisation can build on this familiar territory to provide the next generation with further opportunities, opening up access to a greater variety of assets through fractional ownership and improved liquidity – from real estate to art to commodities.

The step from transacting in virtual gaming currencies to investing in virtual real-world assets is a natural transition.

An extension to that is the opportunity to create a far more fluid, flexible, and diverse financial landscape that is more tuned in to this generation’s thinking than more traditional approaches to financial management and investment.

The V-Bucks Generation don’t want to be restricted to certain investment types, strict timelines, or limited payment options. They want flexibility, ways to transact online that can pivot to suit their needs, and platforms that can support new ways to generate returns. Tokenisation answers that call by automating services, allowing for self-executing agreements and reducing reliance on intermediaries.

Finally, this generation are not only gamers – they are digital entrepreneurs who value flexible working, owning their career opportunities and having the ability to create and customise their own ventures. The liquidity tokenisation offers to start and scale up businesses, driven by this generation, is a natural next step and could prove transformational in enabling V-Bucks innovators to attract alternative sources of funding to their start-ups from diverse sources.

The added benefits of greater efficiencies through, for example, smart contracts can also be hugely beneficial for start-ups, whilst tokenisation offers the ability to influence investor behaviours too, by building digital communities that can align stakeholders in a powerful way and build organic brand loyalty.

And it’s cyclical. Not only are V-Bucks innovators driving their own start-ups – they are also interested in supporting and investing in other, perhaps related or ancillary, start-ups. Far more than just being a transactional tool, tokenisation enables an interlinked virtual business, social and entrepreneurial environment to flourish.

With predictions suggesting that the value of tokenised real-world assets could quadruple in the year ahead, the potential for growth in the near term is clear – and the V-Bucks Generation transition is more than just an opportunity. It is bringing a new way of working, transacting and living. Asset managers need to be alive to that transition now, developing products and solutions that draw on tokenisation to meet shifting expectations around value, risk, opportunity and efficiency.

Jurisdictions need to lean in too – tokenisation and automated systems such as smart contracts are only as good as the platforms that underpin them. The value jurisdictions can add in terms of governance, experience and expertise will be critical as this transition occurs. Accordingly, regulation is evolving all the time – Jersey, for instance, updated its guidance for the tokenisation of real-world assets last year and is seeing strong interest in its regulatory framework to support the application of tokenisation in diverse ways.

Tokenisation across the investment sector continues to move at pace – and the industry must get it right and move in line with this generational transition if it is to succeed in creating value, driving growth and nurturing innovation.

Contact Philip Pirecki to continue the discussion or to learn more about his work in the US.