How blockchain is democratising access to stocks, bonds and ESG investments
Tokenised securities are traditional financial assets – like stocks, bonds, or real estate – digitally represented on a blockchain as tokens that confer legal ownership rights. For investors, this means accessing high-value assets with fractional ownership, 24/7 trading, and transparent, immutable records – all while automating compliance through smart contracts.
The world’s major stock exchanges are now rapidly entering this space, transforming tokenisation from a niche crypto experiment into mainstream infrastructure.
What are tokenised securities?
Tokenisation converts ownership rights into digital tokens on a distributed ledger. Tokenised securities represent the digital evolution of traditional stocks, bonds and funds. Each token represents a fraction (or full share) of an underlying asset and can be bought, sold or traded just like traditional securities.
Security tokens differ from regular crypto tokens in that they provide legal rights and investor protections equivalent to those of traditional securities. When you invest in tokenised securities, you’re buying regulated financial instruments on blockchain infrastructure.
What this means for investors
- Democratised access to illiquid assets – previously inaccessible assets, such as commercial real estate, fine art and private equity, are now available in smaller denominations through tokenised securities. A £10 million property can be divided into 1 million tokens, letting investors buy exposure with as little as £10.
- Enhanced liquidity – tokenisation transforms illiquid assets into tradable digital tokens, enabling secondary market trading for what were previously locked-up investments. This is one of the key benefits of tokenised securities for retail and institutional investors alike.
- Lower costs & faster settlement – blockchain eliminates many intermediaries (brokers, custodians, clearinghouses), reducing fees. Smart contracts automate dividend distribution, interest payments, and compliance in tokenised securities markets.
- Transparency & trust – every transaction is recorded on-chain, providing real-time ownership verification and audit trails that traditional systems cannot match. This transparency is a major advantage of tokenised securities over traditional investment vehicles.
What major exchanges are doing in this space
The traditional financial infrastructure is moving fast. The world’s leading exchanges are investing heavily in tokenisation, signalling that blockchain-based securities are becoming part of mainstream market infrastructure.
London Stock Exchange Group (LSEG) launched its Digital Markets Infrastructure (DMI) platform in September 2025, becoming the first major global exchange group to deploy blockchain-based infrastructure for private funds and tokenised assets. Initially focused on private markets, DMI supports the full asset lifecycle—from issuance and tokenisation to settlement and servicing—and is expected to expand into additional asset classes.
Euronext is expanding regulated access to digital assets across its European markets through crypto-linked exchange-traded products (ETPs) and related digital asset initiatives. Its focus is on integrating digital assets into regulated market ecosystems while maintaining exchange-grade trading and post-trade services.
The New York Stock Exchange (NYSE) is developing a dedicated Digital Trading Platform for tokenised securities in partnership with Securitize, a fintech. Subject to regulatory approval, the platform is expected to support 24/7 trading, fractional ownership, and near-instant settlement of tokenised equities and ETFs, bringing blockchain technology into the heart of US capital markets.
Nasdaq is developing an equity token framework that allows shares to be issued and held in tokenised form while preserving shareholder rights, corporate governance, and existing regulatory protections. Its approach integrates tokenisation into established market infrastructure rather than creating a separate digital marketplace.
China’s capital markets, including institutions associated with the Shanghai Stock Exchange (SSE), are exploring blockchain and tokenisation technologies as part of broader efforts to modernise financial market infrastructure, although large-scale tokenised securities platforms have not yet emerged on the scale seen in the UK or US.
Singapore Exchange (SGX) has been a pioneer in blockchain-based settlement, working closely with the Monetary Authority of Singapore (MAS) on tokenised assets and delivery-versus-payment (DvP) solutions. Its projects have demonstrated how tokenised securities can be exchanged and settled efficiently across different distributed ledger platforms.
The ESG angle
The regulatory angle
Tokenised securities are regulated financial instruments. In the UK, they generally fall within existing financial services regulations and are overseen by the Financial Conduct Authority, with firms expected to meet the same standards that apply to traditional securities. In the EU, offerings must comply with MiFID II and require full KYC/AML compliance, including investor whitelisting. In the US, the U.S. Securities and Exchange Commission has confirmed that tokenised securities are subject to existing securities laws. In Singapore, the Monetary Authority of Singapore has adopted a supportive approach to asset tokenisation while requiring compliance with securities, licensing, and anti-money laundering regulations.
Key compliance requirements for tokenised securities:
- Classify tokens correctly (security, utility, or other regulated category)
- Implement robust KYC/AML procedures and investor verification
- Use regulated or authorised tokenisation and trading platforms (e.g. NYSE, LSEG, Euronext, SGX)
- Ensure compliance with applicable UK, EU, US, and Singaporean securities regulations
- Align sustainable assets with relevant ESG frameworks, including UK sustainability disclosure requirements, the EU Taxonomy, and Singapore’s sustainable finance guidelines
- Maintain appropriate governance, custody, disclosure, and investor protection arrangements for digital assets and tokenised securities
The bottom line for investors
Tokenised securities offer a compelling value proposition: fractional ownership of premium assets, 24/7 liquidity, and automated compliance—all on a transparent blockchain. The fact that NYSE, LSE, Euronext, and SGX are all building regulated infrastructure signals this is no longer experimental—it’s the future of market infrastructure for tokenised securities.
The ESG angle is particularly powerful for impact-driven investors who want to:
- Track verifiable environmental/social outcomes on-chain through tokenised securities
- Invest in previously inaccessible green projects using tokenised securities
- Avoid greenwashing through transparent impact reporting in tokenised securities markets
- Align portfolios with sustainability values while maintaining liquidity via tokenised securities
As major exchanges mature their tokenisation platforms and regulatory frameworks solidify, tokenisation is poised to democratise not just access to assets, but also access to meaningful ESG impact—making sustainable investing more transparent, efficient, and inclusive through tokenised securities.
Final thoughts
Tokenised securities represent a fundamental shift in how capital markets work. The involvement of major exchanges confirms that blockchain infrastructure is entering mainstream finance – not replacing it.
For investors, this means expanded access to fractional commercial real estate, green bonds, and private equity through regulated exchanges, all with the protection you expect from established institutions.
Three key takeaways:
- Start with regulated platforms (LSEG, Euronext, etc) that operate within existing frameworks
- Think long-term, not speculative – tokenisation is about efficiency, not quick gains
- Consider ESG as a filter – tokenised green bonds offer both returns and measurable environmental impact
By 2026 and beyond, tokenised securities are becoming the default for how certain assets are issued, traded and settled. The question is not whether they will matter to your portfolio – it is when and how you will engage with them.
DISCLAIMER: This article is for informational purposes only and constitutes financial guidance, not regulated financial advice. P27 is not FCA-authorised, and I am not a financial adviser. This does not constitute a personal recommendation to invest. Tokenised securities are regulated instruments, and all investments carry risk. Before investing, consult a financial adviser registered on the FCA Directory.
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