What is Tokenisation?

We’re progressing toward the next era of the internet in fits and starts. Web3 is said to offer the potential of a new, decentralised internet, controlled by participants via blockchains rather than profit-motivated corporations. But progress hasn’t been linear: one major setback has been the meltdown of the cryptocurrency market in 2022, triggered by multiple cryptocurrency failures and high-profile cases of fraud. Regulators are paying increased attention to Web3 players, and public curiosity is peaking.

But Web3 is about much more than crypto. Blockchain, smart contracts, and digital assets—the latter created via a process called tokenisation—stand to change the way we exchange ideas, information, and money. For organisations and early adopters, there is significant value on the table.

Let’s get specific: tokenisation is the process of issuing a digital representation of an asset on a (typically private) blockchain. These assets can include physical assets like real estate or art, financial assets like equities or bonds, nontangible assets like intellectual property, or even identity and data. Tokenisation can create several types of tokens. Stablecoins, a type of cryptocurrency pegged to real-world money designed to be fungible, or replicable, are one example. Another type of token is an NFT—a nonfungible token, or a token that can’t be replicated—which is a digital proof of ownership people can buy and sell.

Tokenisation is potentially a big deal. Industry experts have forecast up to $5 trillion in tokenised digital-securities trade volume by 2030.

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