Yasuda on Tokenization

Governments and regulators across the globe are now treating tokenization as a fundamental component of financial modernization. Countries like the UK, Brazil, and Argentina have introduced or revised regulatory frameworks that explicitly support tokenization of financial instruments and real-world assets. For example, the UK Financial Conduct Authority (FCA) is enabling fund tokenization through a pro-growth strategy, while Brazil's CVM is working to simplify tokenization procedures across capital markets.

This growing regulatory acceptance provides essential clarity and legitimacy for industry stakeholders. Argentina’s National Securities Commission has issued a framework that facilitates asset digitization, aiming to broaden investor participation in markets like agriculture and real estate. Indonesia’s Project Wira forecasts an 80-fold market expansion by 2030, catalyzed by a combination of demographic trends and fintech innovation.

These frameworks signal a shared commitment among both developed and emerging markets to integrate tokenization into capital markets. Governments are now collaborating with international organizations and private-sector innovators to ensure tokenization is secure, inclusive, and scalable. This global convergence may pave the way for standardized cross-border protocols in the near future.

The real estate sector is proving to be a primary entry point for tokenization initiatives. In the U.S., Blocksquare and Vera Capital announced a $1 billion program to tokenize commercial and multifamily real estate, targeting investors globally. Meanwhile, countries like El Salvador, Argentina, and Chile are using tokenization to make real estate investment accessible to retail investors through fractional ownership models.

This use case addresses long-standing challenges in real estate: high entry costs, limited liquidity, and complex ownership transfer processes. With blockchain technology, properties can be broken down into digital shares that are tradable, reducing frictions in the market. This creates pathways for broader investor bases, including those historically excluded from property markets.

However, tokenized real estate also presents risks such as regulatory ambiguity and potential asset speculation. Success will depend on strong legal structures that recognize digital ownership and ensure investor protection. If executed correctly, real estate tokenization could be a flagship model for RWA tokenization as a whole.

A recurring theme in tokenization news is the role of digital identity and Know Your Customer (KYC) solutions. In Switzerland and Brazil, national efforts are underway to integrate blockchain-based digital IDs into financial ecosystems. Bradesco’s upcoming decentralized ID system and Switzerland’s e-ID referendum reflect attempts to enable seamless, secure identity verification across financial services.

These digital identities are not just for user onboarding—they are foundational to regulatory compliance. By leveraging verifiable credentials and decentralized identifiers (DIDs), financial institutions can automate and standardize KYC procedures. This reduces onboarding friction while enhancing security and cross-border operability.

The effectiveness of these systems depends on interoperability and adoption. If countries successfully implement e-ID systems compliant with global standards (e.g., W3C, eIDAS), they could become the backbone of tokenized finance. This would greatly support decentralized finance (DeFi), securities issuance, and governance systems requiring trusted, fraud-resistant identity solutions.

Tokenization is increasingly being positioned as a means to democratize access to capital and investment opportunities. Countries like Argentina and Indonesia highlight its potential to include younger, digitally native populations in traditionally exclusive markets like equities, real estate, and commodities. Retail-friendly regulation is fostering these developments by lowering thresholds for participation.

Fractional ownership enabled by tokenization reduces minimum investment sizes and facilitates global access. Through mobile apps and blockchain wallets, users can invest in assets they previously couldn’t afford or reach—whether it's a downtown apartment or a tranche of agricultural output. Argentina’s regulations, for instance, allow token-based investment via cryptocurrency wallets, making the process accessible and intuitive.

However, democratization brings challenges. It demands robust consumer protection, especially when retail investors engage with complex or volatile assets. Regulatory clarity, investor education, and platform accountability must accompany this access to prevent exploitative behavior or misinformation. Done right, this trend could rewire capital formation around inclusivity.

Governments aren’t just regulating—they’re building. From Spain’s national blockchain network to Switzerland’s $40M research center in Zug, public investment is powering infrastructure for long-term blockchain integration. These national platforms aim to support public services, streamline financial systems, and position countries as leaders in the digital economy.

Such efforts reflect a shift from exploratory pilots to production-grade deployment. In Spain, the blockchain network aims to boost innovation in finance and logistics. In Zug, the university-affiliated research hub will bridge technical, legal, and philosophical aspects of blockchain, reinforcing Switzerland’s leadership in crypto-friendly policy and innovation.

These government-backed moves provide a trusted layer atop which startups, enterprises, and institutions can build. Public infrastructure initiatives help legitimize blockchain in the eyes of conservative sectors, including traditional finance and regulatory bodies. If sustained, this wave of investment will underpin the global standardization and adoption of tokenized systems.

Alongside expansion, tokenization faces scrutiny and setbacks. The Netherlands and Canada have both reported rising cases of crypto investment fraud, underscoring vulnerabilities in current consumer protection mechanisms. In Argentina, the “Cryptogate” scandal involving President Milei’s endorsement of the $LIBRA token eroded public trust and sparked legal inquiries.

Such incidents highlight the darker side of tokenized and decentralized finance—where regulatory gaps can be exploited and reputational damage can be significant. Fraudulent schemes often use the appeal of tokenized assets to lure investors, particularly in jurisdictions with financial instability or lax enforcement.

Mitigating these risks will require a blend of regulation, technological safeguards, and investor education. Regulatory sandboxes, like El Salvador’s joint initiative with the U.S. SEC, offer a promising model to pilot safeguards in controlled environments. Ultimately, public trust in tokenization will hinge on how effectively these risks are managed.