DIGITAL MONEY AND TOKENIZED ASSETS

Tokenized Security

A traditional financial instrument—equity, bond, or fund unit—represented as a digital token on a blockchain, with ownership rights, transfer restrictions, and corporate actions managed by smart contract logic.

EXAMPLE

Franklin Templeton's FOBXX tokenized money market fund distributes dividends automatically via smart contract, eliminating the fund administrator's manual allocation process.

Relevant Roles and Functions

On-chain Role
Digital Asset Markets
Head of Tokenization
Function
Digital Securities Infrastructure
Tokenized Bond
Tokenized Funds
Tokenized Treasuries
TradFi Equivalent
Asset Servicing / Custody
Capital Markets
Securities Issuance
Structured Products

Related Terms

Tokenization

The process of representing ownership rights to a financial or physical asset as a digital token on a blockchain, enabling programmable transfer, fractionalization, and 24/7 settlement without traditional intermediaries.

Example

J.P. Morgan's Kinexys platform uses tokenization to enable intraday repo settlement of money market fund shares as on-chain collateral.

Real-World Asset

A traditional financial or physical asset—such as a government bond, real estate, private credit facility, or trade receivable—that has been tokenized and represented on a blockchain for on-chain trading, settlement, or collateral use.

Example

BlackRock's BUIDL fund tokenizes U.S. Treasury exposure, allowing institutions to use the token as real-time on-chain collateral instead of wiring cash.

Fractionalization

Dividing a high-value asset into smaller, tradeable units via tokenization, reducing minimum investment thresholds and enabling broader distribution of previously illiquid or wholesale-only asset classes.

Example

Fractionalization of a $50M private credit facility into $1,000 tokens allows wealth management platforms to offer exposure to institutional-grade credit within retail-friendly minimums.

Smart Contract

Self-executing code deployed on a blockchain that automatically enforces and carries out the terms of an agreement when predefined conditions are met—without requiring an intermediary to oversee performance.

Example

A smart contract can automatically release collateral when a loan is repaid, eliminating manual processing and reducing operational risk.

Atomic Settlement

The simultaneous, conditional exchange of two assets in a single blockchain transaction—both legs complete or neither does—eliminating the gap between trade execution and final settlement that creates counterparty risk in traditional markets.

Example

Atomic settlement of tokenized Treasuries versus stablecoins achieves true delivery-versus-payment with no T+1 lag and no central counterparty required.