Tokenized financial markets are unlikely to become fully on-chain in the foreseeable future.

Instead, a selective approach will take shape, where blockchain is used for functions that benefit from decentralization, shared verification, and programmability, while other processes remain off-chain where privacy or legal considerations prevail, top executives at organizations including Boerse Stuttgart Group, Boston Consulting Group (BCG), Temasek, and Fireblocks, said during a roundtable discussion.

The statements appeared in a report released in September 2026 summarizing a cross-sector roundtable on the future of digital capital markets taking place at Point Zero Forum 2026 on June 23, 2026, in Zurich.

Eleven senior leaders joined the roundtable, including Lucas Bruggeman, CEO of BX Swiss AG and Chief Digital Assets Officer at Boerse Stuttgart Group; Roy Choudhury, Managing Director and Senior Partner, BCG; Kevin Lim, Director, Investment (Blockchain), Temasek; and Varun Paul, Senior Director, Financial Markets, Fireblocks.

Benefits of blockchain in capital markets

Participants noted that blockchain technology offers several benefits to capital markets, including operational improvements, digital transformation of market infrastructure, and more efficient allocation of capital.

Operational efficiency was consistently identified as one of the primary advantages of on-chain capital markets, with participants highlighting that distributed ledger technology (DLT) enables greater automation through smart contracts, programmability and straight-through processing, thereby reducing manual processes and simplifying post-trade operations.

The conversation also emphasized faster settlement, enabling capital and collateral to move more efficiently throughout the financial system. Several participants also identified collateral mobility as a particularly important benefit, unlocking additional liquidity and materially improving the utilization of assets.

Beyond efficiency gains, the discussion explored the potential to improve both access to and integration of capital markets. Participants stressed that digital issuance processes can lower barriers for issuers by making fundraising faster, simpler and less costly. This is especially relevant to small and medium-sized enterprises (SMEs) that have long faced limited access to capital markets.

An hybrid approach

Participants agreed that tokenized financial markets are unlikely to become fully on-chain in the near future. Instead, they favored a selective approach, applying blockchain to functions that benefit from decentralization, shared verification, and programmability.

Functions expected to benefit the most from blockchain-enabled shared records, deterministic outcomes and automation through smart contracts include ownership records, asset issuance, settlement instructions, lifecycle events, and collateral management.

Participants noted that certain information should remain off-chain because of privacy, confidentiality and regulatory requirements. This covers personal data, transaction details, proprietary business information, books and records, as well as legal and compliance documentation.

Still, this sensitive information could be linked to blockchain transactions through verifiable credentials or cryptographic proofs when needed, preserving privacy while retaining verifiability.

Some operational processes were also viewed as more suitable for off-chain environments due to latency and complexity constraints. These include price discovery, trade matching and trading engines. However, technological advances could shift some of these functions on-chain over time.

Market readiness

Overall, participants agreed that tokenized capital markets remain in an early phase of development, with most stakeholders favoring a gradual approach. This implies keeping current trading processes, settlement cycles, and operational arrangements while introducing blockchain selectively where immediate value is clear.

As a result, participants widely expect traditional and blockchain-based infrastructures to coexist for an extended period, requiring institutions to maintain parallel systems and justify additional investment through clear and measurable business benefits.

Participants also noted that the successful adoption of institutional tokenized capital markets will depend on the availability of supporting infrastructure, including reliable digital settlements. A recurring concern was interoperability, with participants arguing that new blockchain-based infrastructure will need to remain connected to existing financial market systems.

Tokenized capital markets in Asia

Globally, Asia is rapidly emerging as a center for tokenized capital markets, driven by supportive regulatory frameworks, institutional pilots, and DLT integration.

Under Hong Kong’s September 2026 Policy Address, the government said it will promote the trading of regulated stablecoins on licensed virtual‑asset trading platforms (VATPs) and their use in the settlement of tokenized money market funds.

In South Korea, the Financial Services Commission (FSC) published in October 2026 draft rules to enable securities such as stocks, bonds, and funds to be issued and traded as digital tokens on blockchain-based systems, starting February 04, 2027.

In 2025, Asia dominated the global market for DLT fixed-income issuance, generating EUR 3.8 billion in proceeds, according to a 2026 report from the Association for Financial Markets in Europe (AFME). The figure represents an 80% share of the EUR 4.8 billion in DLT-based instruments issued worldwide last year.

Year-over-year (YoY), DLT fixed-income issuance grew 48% in 2025. Financial institutions dominated issuance last year, representing 57.5% of the total, followed by government and municipal issuers which accounted for 25.8%, supranational, sovereign, and agency (SSA) issuers, accounting for 6.2%, and corporate issuers, accounting for 10.4%.

By 2030, Citi estimates that the global tokenized asset market, comprising real-world assets, securities, funds and investment products, cash and monetary instruments, and digital-native assets, could reach US$5.5 trillion in a base case scenario, with a bear case of US$2.7 trillion and a bull case of US$8.2 trillion. That market currently stands at approximately US$17 billion.

Featured image: Edited by Fintech News Singapore, based on image by Ashian via Magnific