Tokenization & digital assets

Tokenization is the process of converting ownership rights in an asset into a digital token recorded on a blockchain or distributed ledger. In financial markets, it is used to represent assets like securities, funds, bonds, real estate, or commodities in digital form, enabling easier issuance, trading, settlement, and transfer of ownership.

Real-world asset tokenization is the creation of blockchain-based tokens that represent ownership or economic rights in tangible or traditional financial assets, such as real estate, private credit, bonds, commodities, or invoices. These tokens connect off-chain assets to on-chain infrastructure.

Key benefits include:

• Fractional ownership: Investors can buy smaller portions of high-value assets.
• Improved liquidity: Assets that are usually hard to trade may become easier to buy and sell.
• Faster settlement: Blockchain can reduce settlement times.
• Lower costs: Automation can reduce administrative and intermediary costs.
• Greater transparency: Blockchain records can improve auditability and visibility.
• Broader access: More investors may be able to participate in markets previously limited to large institutions.

A wide range of assets can be tokenized, including:

• Equities
• Bonds
• Funds
• Private equity interests
• Private credit
• Real estate
• Commodities
• Structured products
• Trade finance assets
• Carbon credits
• Collectibles and intellectual property rights

Blockchain does not eliminate all risk, but it enhances security by:

• Using cryptographic protection to secure records and transactions
• Providing an immutable ledger, making records difficult to alter
• Enabling transparent transaction histories
• Reducing operational errors through automation and smart contracts
• Lowering reliance on manual reconciliation and fragmented recordkeeping

Tokenization platforms are technology solutions that help firms create, manage, issue, and sometimes trade digital tokens representing assets. Broadridge’s featured services include:

• Wallets & custody - Secure digital asset key storage and management integrated into your account structure
• Connectivity - Access to digital asset platforms and trading venues
• Trade & post-trade - Unified settlement, reporting, and recordkeeping
• Governance - Corporate actions, proxy, disclosure, and compliance across digital and traditional assets
• Issuance & distribution - Tokenize assets (minting and burning) and distribute assets to selected channels
• Recordkeeping & servicing - Digital TA and lifecycle servicing for subscriptions, redemptions, and distributions

Not all assets can be practically or legally tokenized. In theory, many assets can be represented digitally, but successful tokenization depends on:

• Legal recognition of ownership rights
• Clear asset valuation
• Transferability
• Regulatory compliance
• Reliable custody and servicing arrangements
• Market demand

• Asset managers are looking to support tokenized funds and assets with trading, post-trade, governance, and wallet services.
• Tokenized funds can be a differentiator but only if issuance and distribution fit within existing product workflows.
• Managers need support for on-chain product enablement, investor eligibility, transfer agency alignment, and ongoing servicing.
• The goal is to launch tokenized products while maintaining the same standards for compliance, oversight, and scale.

• Banks and capital markets firms are focused on extending existing infrastructure into tokenized and digital asset workflows.
• The drivers are faster settlement, better capital efficiency, improved collateral mobility, and greater transparency.
• Firms need support across trading, liquidity, trade capture, settlement, and reconciliation.
• The opportunity is meaningful, but success requires integration with existing risk, control, and post-trade frameworks.

• For wealth firms, digital assets need to be integrated into existing advisor and client experiences.
• Advisors need tools to access, explain, and report on digital assets in familiar ways.
• Firms also need secure connectivity, custody infrastructure, and consolidated reporting.

• Issuers are exploring digital securities as a way to modernize capital raising and shareholder engagement.
• Critical needs include minting and issuance support, ownership controls, transfer restrictions, and governance workflows.
• The focus is on making digital securities operationally sound and compliant from end to end.
• This requires connecting issuance activity with servicing and governance requirements – exactly what we are doing with Galaxy, the first public company to use our platform to bring proxy voting and governance for tokenized equities on-chain alongside traditional shareholder holdings.