The Bank for International Settlements stated the case plainly in June 2025. In its Annual Economic Report, economic adviser Hyun Song Shin described tokenisation as “the next logical progression in the evolution of the monetary and financial system.” Not a fringe experiment. A progression. The kind of structural shift that central banks now build around rather than guard against.
Yet fear persists in fintech and enterprise finance. CFOs hesitate. Risk committees stall. The hesitation is understandable, and most of it traces to four specific concerns: regulatory uncertainty, operational risk, liquidity fragmentation, and legal ambiguity. This post takes each one in turn, tests it against the evidence, and shows what a sovereign, compliant settlement layer looks like in practice.
What is tokenisation in finance?
Tokenisation is the process of recording a claim on a real or financial asset onto a programmable platform.
That is the BIS definition, and it is worth holding onto because it strips away the noise. A tokenised bond is still a bond. A tokenised deposit is still a deposit. What changes is the rail it moves on. Tokenisation merges three steps that traditional systems keep separate: messaging, reconciliation, and settlement. It collapses them into a single operation.
The familiar version is a paper certificate. Sixty years ago, buying a security meant holding a physical document and clipping coupons for interest. Settlement took five days. We dematerialised those certificates into electronic book entries decades ago. Tokenisation is the same move, one layer deeper. The asset and the rules that govern its transfer now live together on the same programmable record.
This is not crypto. The distinction matters to a skeptical reader, so state it directly. The OECD draws “a clearer divide between crypto-assets and regulated tokenised assets” in its 2025 policy paper. Tokenised finance refers to regulated instruments on controlled infrastructure. It is the opposite of an anonymous, permissionless free-for-all.
Should fintechs be afraid of tokenisation?
No. The dominant risk is not adopting tokenisation. It is being late to it while competitors and central banks build the rails without you.
The evidence points one direction. The BIS is running live projects with central banks across seven jurisdictions. The IMF published a dedicated note on tokenized finance in its 2026 series. The OECD is advising supervisors on how to remove the friction, not whether to allow it. When the three institutions that set the tone for global financial regulation converge on the same conclusion, the prudent reading is clear.
That said, the fears are real and deserve direct answers. Here they are.
Fear 1: Regulatory uncertainty
The fear: rules are unsettled, so adopting tokenisation now means building on sand.
The evidence says the opposite. Regulators have already converged on a workable principle. The OECD calls it technology neutrality: “same activity, same risk, same regulation.” A tokenised bond faces the same supervisory expectations as a conventional bond. You are not waiting for a new rulebook. The existing one applies.
The BIS reinforced this in 2025, calling for “technology-neutral regulation based on the principle of same activities, same risk, same regulatory outcomes.” More than 60 percent of jurisdictions surveyed by the BIS already had or were developing frameworks for stablecoins and tokenised instruments. The European Union, Japan, and Singapore now require issuers to obtain authorisation and incorporate locally. They are signs of a perimeter being drawn.
What is genuinely uncertain is narrower than the fear suggests. Cross-border coordination remains incomplete. Some jurisdictions still lack clarity on whether a token confers ownership of the underlying asset. Those are real gaps. But they are gaps in harmonisation, not in whether tokenisation is permitted.
Build on infrastructure designed for compliance from the start, and regulatory uncertainty becomes a manageable variable rather than a blocking risk.
Fear 2: Operational risk
The fear: new technology introduces new ways to fail, and settlement systems cannot afford to fail.
This is the right instinct applied to the wrong target. Operational risk in tokenised systems is real and documented. The OECD lists it directly: scalability limits, settlement finality questions, cyber-risk, smart contract code errors, and private key compromise. A serious institution should take each one seriously.
But weigh it against the operational risk you already carry. A single cross-border payment today passes through a chain of correspondent banks, each making separate account updates across different time zones and holiday calendars. The BIS notes that this separation of “messaging, reconciliation and settlement creates additional frictions in international payments,” where “errors may remain undetected longer, increasing resolution costs and operational risk.” The status quo is not low-risk. It is high-risk in a way familiarity disguises.
Tokenisation reduces specific failure modes. Atomic settlement means a transaction either completes in full or not at all. The BIS describes this as eliminating “the risks associated with partial or failed transactions.” Delivery-versus-payment removes the window where one party has delivered and the other has not. These are not new risks. They are old risks removed.
The remaining operational concern is execution. Code can be wrong. Keys can be lost. The answer is not to avoid the technology. The answer is to run it on production-tested infrastructure with proven capacity rather than a proof-of-concept. Transactix has processed billions of dollars across tens of millions of transactions, with peak capacity between 20,000 and 30,000 transactions per second. Scale is not a hypothetical for systems already operating at scale.
Fear 3: Liquidity fragmentation
The fear: assets split across incompatible networks, and liquidity that should pool instead scatters.
This is the most legitimate fear on the list. The OECD identifies it precisely. Markets risk “bifurcation of liquidity between on-chain and off-chain markets for the same asset,” which can dry up liquidity in off-chain markets and “the delinking of the token’s price from the price of the underlying asset.” When an asset trades on networks that cannot talk to each other, the network effect that makes markets liquid breaks down.
So acknowledge it. Fragmentation is a structural risk, and pretending otherwise would be dishonest.
The cause, however, is not tokenisation itself. It is the absence of interoperability. The OECD names the solution as well: “technological interoperability between a variety of different, but connected, ledgers.” The problem is solvable, and the solution is architectural. Build one framework that moves across institutional and provincial boundaries, and liquidity pools rather than scatters.
This is the design choice that separates a sound settlement layer from a speculative one. A network that forces every counterparty onto an isolated island recreates the very fragmentation that worried you. A network built for interoperability from the foundation does not. The Open Value Network™ moves fiat, cryptocurrencies, rewards, and digital credits across a single framework, which is the structural answer to the fragmentation fear.
Fragmentation is a consequence of poor architecture, not of tokenisation. Choose interoperable infrastructure and the fear dissolves.
Fear 4: Legal ambiguity
The fear: the law has not caught up, so the legal standing of a tokenised asset is unclear.
Parts of this are accurate, and the OECD documents them. In some jurisdictions, “ownership of a token does not necessarily accord ownership to the underlying asset.” The legal status of smart contracts is unsettled in places. Settlement finality under distributed ledger rules can be ambiguous. These are not trivial points for a CFO signing off on institutional exposure.
But ambiguity is not absence, and it is narrowing. Jurisdictions are passing law specifically to close these gaps. The United Kingdom launched its Digital Securities Sandbox in September 2024, a regulated live environment that temporarily modifies legislation so firms can issue, trade, and settle real digital securities under supervision. The UK has announced a pilot digital gilt instrument using the same framework. When a sovereign issues its own debt on the rail, the legal question stops being theoretical.
The practical defence against legal ambiguity is the same one that has always protected institutional finance: regulated custodians, clear jurisdiction, and compliance built into the structure rather than added afterward. The OECD stresses the role of “qualified custodians” in connecting off-chain assets to on-chain records. This is familiar ground for any enterprise that already operates within a regulatory perimeter.
Why Canadian institutions cannot treat this as optional
The decision about tokenised settlement infrastructure is being made now, whether or not Canadian institutions participate in it.
Foreign infrastructure is already entering Canadian settlement. The dependency forms one procurement decision at a time, each one reasonable on its own, collectively determining the architecture of Canadian finance for the next generation.
This is where the structural argument and the commercial argument meet. The BIS vision rests on a trilogy: tokenised central bank reserves, tokenised commercial bank money, and tokenised government bonds on a unified ledger. That architecture is coming. The open question is whose terms it runs on.
Transactix builds the Canadian answer. The Open Value Network™ is sovereign settlement infrastructure governed in Canada, with compliance and security as the foundation rather than an afterthought. CADX™ is the instrument that moves across it: a Canadian dollar-backed stablecoin designed for Canadian institutions, Canadian regulators, and Canadian sovereignty. Together they let a Canadian financial institution settle on sovereign rails without rebuilding its systems from scratch.
That is the difference between fearing tokenisation and using it. One waits for certainty that never fully arrives. The other builds on infrastructure that already processes value at scale, under Canadian control.
A practical checklist for evaluating tokenisation
Before you adopt, test any tokenised settlement solution against these questions.
- Compliance
Is regulatory and AML/CFT compliance built into the design, or bolted on afterward?
- Interoperability
Does the network connect to existing systems and across institutional boundaries, or create an isolated island that fragments your liquidity?
- Settlement finality
Does the system deliver atomic, all-or-nothing settlement that removes partial-transaction risk?
- Proven scale
Has the infrastructure processed real volume in production, or only in pilots? Ask for transaction totals and peak throughput.
- Sovereignty
Who governs the rail, and under whose law does it settle?
If a solution clears all five, the fears in this post no longer apply to it. They were never objections to tokenisation. They were objections to building it badly.
Conclusion
The four fears are real, but they do not survive contact with the evidence. Regulatory uncertainty is narrowing under a clear technology-neutral principle. Operational risk is lower than the friction-laden status quo it replaces. Liquidity fragmentation is a problem of architecture, solved by interoperability. Legal ambiguity is closing as jurisdictions write the law and sovereigns issue debt on the rail.
If you lead finance at a Canadian institution, the question is now whether you will settle on infrastructure you control or on infrastructure someone else governs.