What is tokenisation?

Tokenisation is another way to represent ownership digitally. It uses distributed ledger technology, including blockchain-based infrastructure, to record and synchronise ownership information across authorised participants. Digital tokens represent an asset, such as a share or a cash denomination. 

Tokenisation is an evolution of existing ownership models, not a replacement. Different models may emerge, and they can operate alongside today's market infrastructure and legal frameworks. Over time, tokenisation may create new ways to record, transfer and manage ownership.

Tokenisation represents ownership as digital tokens recorded on a shared ledger. Each token corresponds to an underlying ownership interest, and updates to the ledger track that interest. This creates a synchronised, tamper-resistant record that authorised participants can view and verify. 

Shareholders complete transfers by moving tokens between digital wallets. Predefined rules validate these transactions automatically, often through smart-contract technology. These rules can support regulatory requirements, identity verification, eligibility criteria, entitlement checks and transfer restrictions. 

Smart contracts can make share transfers faster and more transparent through automation. Tokenisation does not replace legal ownership frameworks. The legal register and regulatory requirements remain critical. Issuers still need a trusted and recognised record of ownership to support good governance, shareholder experience and regulatory compliance.

Tokenisation is attracting attention because governments, regulators and market infrastructure providers are exploring how digital technologies could modernise aspects of capital markets.  

UK initiatives such as the Digital Securities Sandbox are helping firms test how digital securities and distributed ledger technology may be used within regulated market environments. 

At the same time, exchanges, custodians, asset managers and market infrastructure providers are exploring how digital ownership and settlement models may develop alongside existing market structures.

Tokenisation may create several benefits for issuers, investors and the wider market as it develops. These benefits include: 

• Faster transaction and settlement processes 
• Greater automation across shareholder servicing and corporate actions 
• More timely, transparent and traceable ownership records 
• Enhanced auditability of ownership data 
• Broader distribution channels for investor participation 
• Potential for improved liquidity where market demand, platform adoption and supporting infrastructure exist 
• Enhanced shareholder engagement 
• Greater operational efficiency 
• Consistent shareholder experiences 
• Industry bodies and regulators are still considering how to implement tokenisation, so the exact benefits will change over time.

Tokenisation is a long-term evolution in how ownership is managed and delivered. It is not: 

• A replacement for legal ownership structures 
• An overnight change 
• A simple technology trend 

Ownership structures may evolve, but many issuer responsibilities will remain the same. You will still need to: 

• Maintain an accurate ownership record 
• Fulfil governance and regulatory obligations 
• Protect shareholder rights 
• Meet identity verification and compliance requirements 
• Deliver a reliable shareholder servicing model 

No matter how models represent ownership, issuers will continue to need a complete, trusted view of ownership and confidence in the integrity of their shareholder records.

Your priorities should remain the same: know your investors, communicate with shareholders, manage corporate actions efficiently, stay compliant and remain in control. Understanding the benefits and limitations of different tokenisation models can help you decide whether they support a better shareholder experience and prepare for future market change.

Different tokenisation models will emerge, each with different implications for control, visibility, governance and investor relations.

The most important question for issuers is where evolving ownership models may create value. Questions worth considering include: 

• How confident are you in your visibility of end investors? 
• Could broader investor access support your growth ambitions? 
• Are there opportunities to improve liquidity or shareholder engagement? 
• How can technology improve operational efficiency? 

The answers depend on your business, your shareholder base and the ownership models that emerge. Some fundamentals will stay the same: 

• Trusted ownership records 
• Effective governance 
• Regulatory compliance 
• Reliable shareholder servicing 
• Shareholder rights and protections 
• Confidence in market infrastructure 

The sooner you understand the options, the better prepared you’ll be to make informed decisions when change arrives.

Your main aim should be to stay informed and remain in control. Staying close to these changes helps you make informed choices as the market evolves, retain strong visibility, deliver consistent shareholder experiences and influence how future ownership models develop. Issuers that stay informed will be better placed to access the opportunities tokenisation may bring.

Tokenisation has significant potential, but the market is still evolving. Issuers should consider regulatory uncertainty, competing tokenisation models and standards, custody and ownership structures, and the ability to identify ultimate beneficial owners. New models also bring technology, operational and adoption considerations. Understanding these issues early can help issuers assess opportunities, manage risks and maintain appropriate oversight, governance and control as the market evolves.

Market transformation will continue, and regulation, technology and investor expectations will affect how ownership works. Our role is to help you navigate that change with confidence. We want to hear your views on tokenisation and understand how it may affect your business. That insight helps us create products and services that align with your long-term strategy. Our approach is simple: 

• Identify what matters to your business 
• Explore the options available 
• Define the right path forward 

We’ll always aim to provide practical guidance that helps you understand the implications of change and make informed decisions that support your long-term objectives. Computershare has spent decades helping issuers navigate market evolution. We combine global expertise, trusted infrastructure and practical insight to help you turn complexity into opportunity and stay in control through the changes ahead.