Tokenisation is increasingly moving out of the crypto conversation and into the infrastructure of mainstream finance.
In September 2026, the European Central Bank launched Pontes, a new system allowing wholesale transactions in tokenised assets to settle using central bank money. The ECB has also begun preparatory work to invest a portion of its own funds in tokenised securities.
In the United States, the Securities and Exchange Commission has introduced a temporary, conditional exemption allowing certain venues to facilitate on-chain trading of tokenised listed stocks.
These developments point to something bigger than another wave of crypto
innovation.
Tokenization is increasingly being treated as a potential way of changing how financial assets are issued, transferred, settled and recorded.
For South African businesses operating in financial services, technology, investment, Web3 or cross-border markets, that raises an important question:
If the asset changes form, do the legal rights and regulatory obligations change with it?
Tokenisation is not simply putting an asset on a blockchain
At its most basic level, tokenisation involves representing an asset, or rights associated with an asset, through a digital token recorded on distributed ledger technology.
But the legal distinction is important.
A token can represent an existing asset, or the token itself can embody the rights associated with the asset. The IFWG has previously distinguished between tokenised securities, where an existing security is represented through a token, and security tokens, where the rights are embedded directly into the token itself.
That distinction can affect everything from ownership and custody to settlement, enforceability and the identity of the party responsible for maintaining the underlying rights.
In other words, tokenisation does not automatically create a new legal category.
It can instead create a new technological layer through which an existing financial or commercial relationship operates.
And that is where the legal questions become much more interesting.
South Africa has been exploring this for years
South Africa is not starting from scratch.
The South African Reserve Bank launched Project Khokha in 2018 to explore the use of distributed ledger technology for wholesale payments. Project Khokha 2, launched in 2022, took the work further by introducing tokenised securities, a wholesale central bank digital currency and a stablecoin-like settlement token issued by participating commercial banks.
The experiments highlighted both the potential of tokenisation and the
questions that would need to be answered before these structures could operate at scale.
Those questions included settlement finality, governance, interoperability, privacy and, importantly, accountability.
Project Khokha 2 showed that a DLT-based platform could combine functions traditionally performed by different financial-market infrastructures. But that also creates a fundamental legal question:
Who is responsible when something goes wrong?
If issuance, trading, settlement and other functions are brought together on a single platform, traditional lines between market participants and infrastructure providers may become less clear.
That does not make the technology unworkable.
It means the legal architecture needs to keep pace with the technological architecture.
The regulatory conversation is now becoming more concrete
The IFWG's 2026 work on tokenisation reflects this shift.
Its tokenisation initiative specifically identifies questions around ownership, enforceability of rights, contractual arrangements, the legal status of digital tokens, licensing, prudential and conduct requirements, and AML/CFT obligations.
This is an important development because the conversation is no longer simply about whether blockchain technology can work.
It is about how existing financial-market rules interact with a new way of representing and transferring rights.
The IFWG's Regulatory Sandbox provides a practical example. One current test involves the tokenisation of an existing Standard Bank exchange-traded fund on the bank's blockchain platform. The stated objective is to explore the impact of tokenising a financial instrument on existing legislation and regulation.
That is precisely the type of question businesses should be asking before launching a tokenised product.
The real issue is the legal relationship behind the token
A token may be digital.
The underlying obligation does not necessarily become digital simply because it is represented on a blockchain.
For a tokenised asset structure, businesses need to consider questions such as:
- What exactly does the token represent?
- Who legally owns the underlying asset?
- What rights does the token holder actually have?
- Where is the authoritative record of ownership?
- What happens if the token and the underlying asset become disconnected?
- Who controls custody and the relevant private keys?
- What happens if a transaction is irreversible but legally disputed?
- Which entity is responsible for errors, fraud or operational failure?
- Which regulatory permissions apply to issuance, dealing, custody, settlement or trading?
- How does the structure operate across borders?
These are not purely technology questions.
They sit at the intersection of corporate law, financial markets regulation, contract, property rights, custody, data governance, AML/CFT and, increasingly, exchange control.
Tokenisation could also change how businesses structure transactions
The commercial implications extend beyond exchanges and investment products.
Tokenisation can potentially support fractional ownership, automated settlement, programmable contractual obligations and new forms of access to traditionally less liquid assets.
South Africa's IFWG has also explored tokenised carbon credits, highlighting potential applications in green finance, including fractional participation, increased accessibility and automated tracking and retirement of credits. At the same time, it has identified questions around whether carbon credits and their tokenised forms fall within existing financial-market regulation.
This illustrates an important point: the legal analysis cannot stop at the technology.
It has to start with the underlying asset, the rights attached to it, the parties involved and the economic function of the arrangement.
From crypto asset to financial infrastructure
This may ultimately be the most important shift.
Early discussions around tokenisation were often framed around cryptocurrencies, NFTs and other digital assets.
The current direction is broader.
We are increasingly seeing established financial institutions and regulators explore whether tokenisation can change the infrastructure supporting traditional assets.
The ECB's move to connect central bank money with tokenised financial markets is a particularly clear example. The SEC's September 2026 action around tokenised listed stocks points in a similar direction, even though the US approach remains subject to specific conditions and limitations.
The question is therefore becoming less:
“Is this a crypto product?”
And more:
“What financial or commercial function is this digital structure performing?”
That distinction is likely to become increasingly important for businesses operating in this space.
What should businesses be thinking about now?
For businesses considering tokenisation, the starting point should not be the blockchain.
It should be the legal and commercial structure.
Before choosing a technology or issuing a token, businesses should understand what rights are being created or represented, how those rights will be enforced, who the relevant intermediaries are, and which regulatory frameworks may apply to each activity.
The technology may make a transaction faster, more transparent or more automated.
It does not, by itself, remove the legal obligations surrounding the transaction.
South Africa's regulatory work is still developing, and the IFWG continues to assess how tokenisation should interact with existing legal and regulatory frameworks.
That creates both uncertainty and opportunity.
For businesses building in Web3 and financial technology, understanding the legal architecture early may become just as important as understanding the technology.
Tokenization may change the way assets move; it does not change the importance of knowing what those assets legally are.