By Simon Forster, Managing Director and Global Co-Head of Digital Assets, TP ICAP

The debate around tokenisation is shifting. The question is no longer simply which assets can be represented on-chain, rather it is what kind of market structure tokenisation makes possible.

This has been evident in recent weeks, with the FCA sounding out market participants on a legal framework for trading tokenised gold ahead of an announcement on regulatory standards expected in the coming months. The interest is not in the token itself but in what it enables, since the tokenised metal can be mobilised as collateral alongside cash and government bonds.

At the start of this year, we conducted an exercise at TP ICAP to assess what tokenisation could mean for the clients and markets we serve. The discussion covered rates, credit, FX, equities and commodities. While the answers differed across asset classes, three themes emerged consistently: continuous markets, precision settlement and on-chain cash.

None of these themes is new. What is different today is the degree of alignment now emerging across the industry. The conversation is becoming less theoretical and more focused on where tokenisation can create practical value.

That shift is visible in the actions of major financial institutions and market infrastructure providers. Traditional firms continue to invest in digital asset infrastructure, while exchanges and market operators are exploring extended trading models and tokenised market infrastructure. London Stock Exchange’s recently announced plans for a 24/5 trading venue illustrate how the industry is increasingly rethinking market access, liquidity and settlement in new ways. Taken together, these developments suggest that tokenisation is becoming less a technology story and more a market structure story.

Precision settlement

Of the themes identified across our business, precision settlement attracted the strongest consensus.

Traditional market infrastructure has become progressively more efficient over time. Settlement cycles have compressed and operational processes have improved. Even so, many markets still rely on standardised settlement windows designed around the constraints of legacy infrastructure.

Tokenisation creates the possibility of greater flexibility. Settlement can be aligned more closely with the specific requirements of a transaction rather than a standard market convention.

That matters because different transactions place different demands on the market infrastructure. A liquidity provider trading large volumes on an exchange may prioritise

netting and operational efficiency. A participant moving collateral or transferring liquidity between venues may place greater value on immediate settlement and the certainty that provides.

The ability to settle to predefined conditions, or within shorter timeframes, has the potential to release capital, improve collateral mobility, and reduce operational friction. This is particularly relevant in markets such as repo, securities lending and derivatives, where significant amounts of collateral and liquidity remain tied up within existing settlement frameworks.

Early implementations are already demonstrating the potential benefits. Euroclear recently completed a pilot involving tokenised gold, Gilts and Eurobonds for collateral management, demonstrating how previously illiquid collateral can be mobilised and used in real-time transactions.

Continuous markets

The second theme is continuous markets.

The underlying point is straightforward: markets operate within defined trading hours; risk does not. Geopolitical events, economic shocks and policy announcements occur around the clock, yet market participants are often constrained by fixed market hours when managing exposures and accessing liquidity.

Digital asset markets have operated on this basis from the outset, providing an early example of round-the-clock price discovery and liquidity. The result is most visible during periods of uncertainty, with crypto assets often among the first markets to react to major geopolitical or macroeconomic developments.

The broader industry is beginning to move in a similar direction. CME already provides near-continuous access for certain products, while exchanges including NYSE and London Stock Exchange are exploring extended trading models. The objective is not simply longer opening hours, but greater flexibility for market participants operating across global time zones and responding to events as they happen.

On-chain cash

The third theme sits at the centre of any future tokenised ecosystem.

Much of the industry’s attention over the last decade has focused on bringing assets on-chain. Bonds, funds, commodities and other financial instruments are increasingly being tokenised. Every transaction, however, still requires a settlement asset.

If the asset exists on blockchain infrastructure but the cash leg remains dependent on systems designed for a different market structure, many of the potential efficiencies are constrained.

This is why stablecoins, tokenised deposits and other forms of digital cash have become such an important area of focus. Efforts by institutions such as Swift and major banks to connect traditional payment infrastructure with tokenised assets reflect growing recognition that digital assets ultimately require a digitally compatible settlement mechanism.

Regardless of the model, the objective is the same: to provide a settlement mechanism capable of operating in the same environment, and at the same speed, as the assets themselves.

Without a reliable settlement asset, tokenisation risks remaining incomplete. Assets may become digital, but the broader efficiencies promised by tokenisation become far harder to achieve.

On-chain cash is therefore not simply a supporting development. It is a critical component of how tokenised markets may function at scale.

What comes next

Each of these developments is valuable in isolation. Their combined significance is greater.

More precise settlement can improve capital efficiency. More continuous markets can help participants respond to risk when it emerges. Digital cash can allow assets and settlement to operate within compatible infrastructure.

Together, these capabilities create the foundation for a more flexible market structure.

Adoption will not be linear. Regulatory, operational and commercial challenges remain substantial, and market structure transitions are typically measured in years rather than months. Interoperability, resilience and liquidity formation will all play an important role in determining the pace of change.

What is becoming clearer is that the next phase of tokenisation will be defined less by the tokenisation of individual assets and more by the infrastructure and market structure that develop around them.

For market participants, the question is no longer simply which assets can be tokenised. It is whether markets can provide access to liquidity when risk emerges, settlement that reflects the needs of the transaction, and cash that moves at the speed of the asset.

The institutions that solve those challenges are likely to shape the next phase of market structure evolution.