The promise of tokenization has long generated hype. But the conversation has matured. What began as experiments in reducing clearing costs has evolved into a structural shift in liquidity, capital management, and collateral mobility. Tokenization is no longer about “if” — it’s about “how much value can you unlock?”
Proving the value
Today, Broadridge’s Distributed Ledger Repo (DLR) platform has grown to be the world’s largest institutional platform for settling tokenized real assets, with over $7T/month in processed repo trades. But early adoption focused on a single use case - intra-company transactions — controlled environments within large banks that needed to optimize their collateral usage across many subsidiaries, booking centres, and branches in different jurisdictions. The value proposition was clear and quantifiable: cost savings of $3–5 million through lower clearing fees and operational efficiencies.
This tangible ROI overcame early skepticism. Still, questions loomed in 2021:
- Scalability: Could distributed ledger technology (DLT) handle trillions in daily flows?
- Regulation: How would tokenized contracts be treated legally?
- Stakeholder buy-in: Compliance and legal had to be convinced before anything could move forward.
Early adopters like Societe Generale and UBS paved the way, engaging regulators and establishing confidence. The key lesson? Adoption happens when the first business case is undeniable and risk mitigations are watertight.
Expanding the benefits
By 2023–2024, tokenization platforms like DLR had proven their resilience and scale. As industry confidence in the technology grew, the benefits grew and the “why” of tokenization shifted: from cutting operational costs to transforming treasury operations and generating revenues.
- Capital management: Better collateral mobility, reduced funding costs, and more efficient balance sheet management.
- Market flexibility: As use cases continue to grow, solutions like DLR’s sponsored repo help firms comply with U.S. and European regulatory shifts like mandatory US Treasury Clearing.
- Revenue opportunities: The emerging intraday repo use case promises to transform funding, improving intraday liquidity management for repo sellers/collateral buyers, and creating new opportunities to optimize deployment of cash and collateral for repo buyers/cash providers.
Today: collateral mobility as the prize
The industry now understands tokenization as a strategic enabler of collateral velocity. Banks can free up and redeploy collateral more rapidly, shaping intraday liquidity strategies that were simply impossible before.
On DLR, intraday repo gives firms the flexibility to manage short-term liquidity within the trading day, meeting funding needs without holding positions overnight.
For cash providers, that same flexibility means cash can be deployed, recalled, and redeployed multiple times a day—helping to keep balance sheets light, reduce settlement risk, and capture incremental yield compared with traditional overnight repo transactions.
Lessons for institutions considering tokenization
Key themes today:
- Shift in audience: Conversations are no longer only with innovation or tech teams, but with treasurers and repo desk heads.
- Focus on interoperability: Success depends on seamless integration with legacy front-office and custody providers and across traditional and digital financial ecosystems.
- Realised scale: With $300+ billion average daily processed volumes on DLR, tokenization is no longer experimental—it’s institutional grade.
For firms still hesitant, the takeaways are pragmatic and universal:
- Anchor your case in early wins: Focus on use cases with rapid, measurable ROI.
- Start where you control dependencies: For DLR, intra-company flows were the lowest- friction entry point.
- Engage compliance and legal early: Regulatory compliance is a non-negotiable enabler.
- Don’t chase tech for tech’s sake: Build solutions that solve real, high-value problems.
Looking ahead
The next two years will see tokenization fundamentally defined by collateral mobility across asset classes — from corporate bonds to equities. The goal isn’t just efficiency – it’s about giving institutions “better velocity” in their use of capital.
With research from the ValueExchange’s DLT in the Real World 2025 study showing that nearly 30% of banks expect to use tokenized collateral by next year, the message is clear: tokenization has moved from pilots to production. The opportunity now lies not in questioning if it will work, but in deciding how to leverage it to your firm’s best advantage.
Tokenization is no longer a buzzword — it’s a business model. Firms that embrace it now will redefine their cost base, their capital flexibility, and their ability to compete in a world where liquidity moves at digital speed.