Tokenise that Digital assets go institutional

Research evidence excerpt

Tokenise that Digital assets go institutional

Barclays | Tokenise that

market investments require substantial minimum commitments, tokenisation may allow

exposure to be acquired and transferred in more flexible sizes.

For institutional investors, the primary benefit of fractionalisation is not broader access

per se, but greater flexibility in portfolio construction and capital deployment. Smaller

ownership units may enable investors to adjust exposures more precisely, build diversified

allocations across a larger number of underlying assets, and gain access to opportunities that

previously required concentrated positions or bespoke investment structures.

That said, fractionalisation itself is not unique to blockchain. Mutual funds, ETFs and private-

market feeder structures have long provided pooled and fractional exposure to underlying

assets. The potential contribution of tokenisation lies in making ownership interests more

granular, operationally efficient and potentially more transferable.

Commercial real estate provides a useful illustration. Today, investors can gain fractional

exposure to property through a REIT or real estate fund, owning a share of a vehicle that itself

owns a portfolio of buildings. Under a tokenised model, by contrast, ownership of a specific

building could be divided into millions of digital units, allowing an investor to own, for example,

a 0.001% interest in a particular office tower in Canary Wharf in London. The key distinction is

not fractional ownership itself, but the ability to create and transfer highly granular ownership

interests in an individual asset rather than solely through a pooled investment vehicle.

[—] New risks to financial stability

The tokenisation of RWAs, particularly MMFs, could introduce new transmission channels