Market participants have identified a wide range of opportunities for capitalising on Singapore’s status as a regional leader in asset tokenisation infrastructure.

The Investment Management Association of Singapore (IMAS) has taken various steps to accelerate understanding and adoption of tokenisation among the investment community. One example is its support for education-focused initiatives, including a foundational e-learning module developed with support from Schroders, Baker McKenzie Wong & Leow and Phillip Capital.

IMAS CEO Carmen Wee suggests that the industry can only progress by building shared knowledge and readiness and says her organisation is uniquely positioned to help its members identify emerging opportunities.

Automation, Transparency and Faster Settlement

So, what do these potential benefits look like? According to Justin Christopher, head of Asia at Calastone, some of the clearest gains are operational: automation, transparency and shorter settlement cycles.

“Integrated properly, tokenisation removes manual reconciliation, embeds compliance into workflows and strengthens risk control,” he says. “Commercially, it also extends distribution.

Tokenised instruments can reach beyond traditional channels into digital-native platforms and new liquidity venues without stepping outside regulated frameworks.”

Looking ahead, Christopher reckons the real opportunity is market-wide efficiency in the form of programmable assets interacting with tokenised cash and collateral, enabling delivery-versus-payment models and more efficient capital movement.

However, he acknowledges that this will only materialise if tokenisation becomes part of trusted market infrastructure where digital and traditional instruments operate seamlessly together rather than in fragmented parallel systems.

“The infrastructure must support both models working together efficiently and securely,” adds Christopher. “Tokenisation will only succeed when it is interoperable, production-grade and connected to global distribution networks.”

Bridging Traditional Finance and Blockchain Networks

The main current and potential future benefits of adopting tokenisation are that financial entities may continue to use their current TradFi infrastructure together with a public blockchain infrastructure while avoiding the creation of separate processing silos for each asset class.

Blockchain also allows for a shortening of the settlement cycle, continuous transactions without any cut-off, and fractionalisation of assets.

That is the view of Hubert Grignon Dumoulin, digital assets senior expert at CACEIS, who notes that industry stakeholders benefit from the network effect of the crypto assets ecosystem while supporting the internet-based finance that is key to attracting digital-native investors and simplifying cross-border distribution of financial products.

“The increased scale will reduce operational costs, while opening up new business models associated with DeFi protocols, organisations and more,” he says. “This technological revolution promises to be so transformative that market participants are cautiously studying the optimal and most secure ways to embrace tokenisation.”

Improving Collateral Mobility and Capital Efficiency

For institutional investors, tokenisation can improve collateral mobility and enable atomic settlement, reducing counterparty and operational risk. For asset owners and investors, fractionalisation and programmability could expand access to assets that were previously operationally complex or illiquid.

“The longer-term opportunity is a more interoperable financial system where assets, cash and data move seamlessly across networks, unlocking new business models,” explains Alvin Chia, head of digital assets innovation Asia Pacific for Northern Trust.

Real-time movement of high-quality assets and clear visibility of exposures enhance liquidity and risk detection, agrees Chetan Karkhanis, SVP, digital asset partnership development at Franklin Templeton.

“In the near future, the real upside is flexibility,” he says. “Because tokenisation allows assets to be fractionalised, distributed more broadly and embedded with logic that automates certain actions, it creates room for new product design and more tailored investment access, particularly in APAC, where cross-border capital flows are significant. Over time, that flexibility could lower barriers to entry and make markets more responsive to investor needs.”

Real-Time Treasury and Asset Movement

Given the programmability of tokenised assets, certain processes can be further automated through smart contracts based on predefined conditions to streamline workflows and lower operational costs.

“Tokenisation could also support the real economy by enabling trade and financial assets to be distributed to a broader pool of investors, potentially expanding access to financing,” suggests Ankur Kanwar, head of transaction banking & cash management, Singapore and ASEAN and global at Standard Chartered.

The bank has introduced a tokenised SGD and USD account balances solution for Ant International on the latter’s blockchain-based real-time global treasury management platform, building on learnings from the Monetary Authority of Singapore’s Guardian initiative.

“The solution was co-created with Ant International and aims to enable it to future-proof its treasury and shift to real-time, 24/7 movement of value in SGD and USD,” says Kanwar.

New Products and Broader Investor Access

Tokenised products have opened up new distribution channels, particularly to digitally native investors, while stablecoins and tokenised money market funds give users the ability to move value or rebalance risk within minutes rather than days.

Meanwhile, tokenised gold products and oil perpetual futures have gained traction for trading and hedging macro events that happen over the weekend or outside of conventional trading hours.

“For institutions, the ability to post digital cash or tokenised treasuries intraday reduces settlement risk and improves collateral efficiency,” says Duncan Trenholme, managing director of TP ICAP Fusion Digital Assets, who adds that the longer-term implications are more significant.

When cash and collateral can move in minutes, funding transitions from broad overnight blocks to precise intraday slices. The short end of the rates curve begins to reflect these finer temporal units, meaning collateral spreads tighten and reuse cycles accelerate.

“At the same time, on-chain-native derivatives lower the marginal cost of creating and servicing instruments, making it commercially viable to build more granular markets, meaning more bespoke exposures and more acute trading strategies for clients,” adds Trenholme.

“Examples include on-chain prediction markets and on-chain derivatives markets. The compression of time and the expansion of the investable universe is where the real commercial impact of tokenisation will be felt.”

Lowering Barriers for Retail Investors

For retail investors, tokenisation has the potential to lower entry barriers through fractional ownership and broaden access to traditionally illiquid asset classes. On the other hand, it creates opportunities for intermediaries to streamline post-trade processes and rethink distribution models.

“Furthermore, if liquidity and standards mature over time, tokenisation could support more efficient capital formation and portfolio diversification,” concludes Huan Kiat, fintech director at PhillipCapital. “Ultimately, its long-term impact will depend on whether it delivers tangible improvements in cost, access and execution compared with traditional structures.”

This article was written by Paul Golden at www.financemagnates.com.Institutional FXRead More

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