Speaking to InvestorDaily, Global X ETFs investment analyst Justin Lin said tokenisation offers “clear advantages” over traditional systems, with use cases far broader than cryptocurrencies.
“This is one of the most exciting and practical implementations of tokenisation and blockchain technology,” Lin said, pointing to applications such as tokenising stocks and bonds.
“At its core, blockchain is a digital ledger for recording transactions, making it naturally suited to financial systems. In this context, tokenisation offers clear advantages ranging from greater security and transparency to 24/7 trading, liquidity creation, streamlined crowdfunding, and more,” he added.
Tokenised assets can be traded globally around the clock, Lin explained, removing the limits of traditional market hours.
He added that tokenisation could also unlock access to traditionally illiquid markets – ranging from private credit and infrastructure to real estate – by enabling fractional ownership.
“As property becomes increasingly unattainable for younger investors, tokenisation enables fractional ownership, allowing individuals to participate in the market without the upfront capital required for a full property,” Lin said.
AMP head of portfolio management Stuart Eliot agreed, describing tokenised transactions as “faster, cheaper, more secure, more transparent” than existing systems.
He argued that tokenisation presents a powerful cost-saving strategy compared with today’s infrastructure.
Path to adoption
But despite the benefits, both analysts noted the dominance of entrenched financial infrastructure remains a major barrier.
“The main barrier to adoption is the dominance of existing infrastructure,” Lin said.
Eliot agreed, telling InvestorDaily that while tokenisation is progressing slowly, “the infrastructure is far from mature”.
“It’s a journey, and it’s still early.”
According to Lin, tokenisation is most compelling in financial and data-tracking contexts, where features such as transparency, speed, fractional ownership, and liquidity can be put to work.
“These are powerful improvements for end users, but they don’t always deliver meaningful upside for entrenched legacy systems,” he said.
In the near term, Lin predicted tokenisation will likely gain the most traction in supply chain management and trade.
“Logistics industries, where transparency, real-time updates, and fraud prevention directly enhance both service providers and end users, stand to benefit immediately,” he said.
Conversely, industries such as finance and real estate, where concepts like 24/7 trading and fractional ownership have long been debated, are likely to experience a more gradual, phased adoption, according to Lin.
“For now, traditional financial firms remain comfortable with proven infrastructure, wary of replacing systems that already work,” he said.
“In short, the prevailing mindset is: ‘Don’t fix what isn’t broken.’”
