IOSCO final report on tokenisation of financial assets

The International Organization of Securities Commissions (IOSCO) has published its final report on the tokenisation of financial assets. The report summarises observations from IOSCO's monitoring exercise led by its Fintech Task Force. It examines the development and adoption of tokenisation and distributed ledger technology (DLT) in capital markets, to share understanding among IOSCO members of current use cases and regulatory responses. IOSCO finds that while tokenisation, enabled by DLT, offers potential efficiency gains such as shorter settlement cycles and improved collateral mobility, adoption remains limited. This is considered to be due to new or heightened risks such as interoperability challenges and the lack of credible settlement assets, which hinder scalability.

Other evolving risks include legal uncertainty, operational vulnerabilities and cyber threats, which mirror existing risk categories but manifest differently under DLT, requiring tailored risk controls. Regulatory approaches to respond to these risks vary globally, with some IOSCO members applying existing frameworks while others have issued new guidance or sandbox programs. The report concludes with examples of steps taken by authorities in various jurisdictions to address the application of existing regulatory frameworks and risks arising from tokenised capital markets products. IOSCO also encourages regulators to apply recommendations from its previous reports on crypto and digital asset markets and decentralised finance to ensure consistent outcomes under the principle of "same activities, same risks, same regulatory outcomes".

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