What is tokenisation?

What is asset tokenisation?

Asset tokenisation means issuing or representing an asset or a right as a digital token on a programmable ledger. A bond, a fund unit or money owed by a bank can have such a representation. The ledger records the token and its transfers; the arrangement behind the token determines what its holder can claim. Tokenisation combines legal and technical arrangements.

Suppose a company issues a token representing a bond. The token can record who holds the bond and apply rules to transfers. The company still owes the payments defined by the bond's terms. Putting the record on a blockchain changes how the holding is recorded and handled, rather than removing the company's obligation to pay.

Here, tokenisation refers to assets and rights. Card-payment tokenisation and tokens used in language models describe different processes.

What does an RWA token represent?

RWA stands for real-world assets. In this context, it refers to assets or claims connected to something outside the crypto network, including financial assets such as bonds as well as physical assets such as property. The label does not itself establish ownership or a right to redemption.

A token linked to gold illustrates the distinction. The ledger can show a transfer from one address to another. It cannot, by that record alone, prove that the gold exists, who holds it or whether the token holder can demand delivery. The link between token and reference asset introduces questions about custody and valuation.

The issuer of a token and the party owing the underlying payment may also be different. If a separate company issues a token linked to a bond, the holder's right might be against that company rather than directly against the bond issuer. The terms need to identify who owes what, how redemption works and what happens if a party cannot pay.

How the ledger and transfer rules work

On Ethereum, a token contract keeps records and implements functions for transfers. A standard such as ERC-20 provides common functions that other applications can use. Additional code may restrict transfers to eligible holders. The smart-contract guide explains how the program applies those instructions.

Other networks have their own issuance features. Stellar, for example, lets organisations issue assets that can move between accounts. Its native asset, XLM, is separate: it pays network fees and supports minimum account balances. Receiving an issued euro token on Stellar does not mean receiving XLM.

Likewise, Ether (ETH) pays for transactions on Ethereum. A tokenised bond using that network remains distinct from ETH. The blockchain record and the asset represented on it answer different ownership questions.

Stablecoins offer a familiar example of a token seeking to follow a currency reference. Their backing and redemption rights depend on the particular arrangement; a currency-linked token is not automatically a bank deposit.

Tokenised securities in the EU

The EU's distributed ledger technology (DLT) Pilot Regime provides a framework for eligible market infrastructures to trade and settle financial instruments, the legal category that includes securities such as bonds. It concerns the infrastructure handling securities issued, recorded, transferred and stored using DLT. A bond represented on a ledger can still fall under EU securities rules.

In June 2025, the European Securities and Markets Authority (ESMA) reported limited initial uptake alongside growing interest from applicants. It recommended changes, including making the pilot regime permanent. The recommendation itself did not amend the law.

What tokenisation leaves unresolved

A transferable token still needs someone willing and able to buy it. An asset that is difficult to sell does not become liquid just because its ownership record can move quickly. Restrictions on eligible holders or redemption can also limit what a holder can do.

Problems arise when a token appears easier to redeem than its underlying asset can support. Code errors, private-key handling and reliance on outside providers add operational dependencies. These liquidity and operational risks sit alongside the underlying asset's own risks.

The practical questions remain concrete: which party must pay or deliver the asset, under what conditions, and what right survives if that party becomes insolvent? A visible token balance alone does not answer them.

A crypto ETP is a different holding

Virtune Stellar ETP provides XLM price exposure through a security held in a brokerage account. It is not a token issued on Stellar, and holding the Stellar ETP gives no right to the assets represented by other tokens on that network.

The same distinction applies to an Ethereum ETP: it follows ETH rather than the value of bonds or fund units recorded on Ethereum. How crypto ETPs work and what an ETP is explain the security and its underlying exposure. Activity in tokenised assets does not establish a future price for XLM or ETH.