The conversation around tokenisation has often been framed as a crypto story. A speculative extension of digital assets into traditional finance. But recent developments suggest something far more consequential is underway. And that tokenisation is moving from experimentation to infrastructure, from cryptocurrencies to improving how securities are handled. 

Nasdaq’s reported framework to distribute tokenised US equities through the crypto exchange Kraken illustrates this shift. Rather than launching a standalone crypto product, the initiative signals that a major exchange operator is exploring how tokenisation can be embedded directly into regulated market structures. 

This matters because it reframes the role of distributed ledger technology (DLT) in capital markets. Tokenisation has proven it can coexist with traditional finance; the question now is how it will reshape the markets’ underlying infrastructure. 

From token wrappers to functional equivalence 

Much of the early wave of tokenised assets amounted to little more than digital representations of existing securities, effectively crypto ‘wrappers’ around traditional financial instruments. In many cases, these structures introduced additional intermediaries rather than removing them. 

The model now being discussed is materially different. In a fully tokenised framework, the token is designed to be functionally equivalent to the underlying security. Shareholder rights, ownership records, and settlement mechanisms are embedded directly within the token layer rather than relying on parallel processes. 

This tokenisation approach has implications far beyond digital trading interfaces. It challenges how post-trade infrastructure operates – the systems responsible for clearing, settlement and custody that underpin modern capital markets. 

Today, many securities transactions settle on a delayed basis, typically two business days after a trade (T+2 settlement). This structure persists across major markets, including the US and Europe. Despite the technological ability to settle transactions far more quickly. According to the Depository Trust & Clearing Corporation (DTCC), its systems process securities transactions worth trillions of dollars every day. This demonstrates the scale and complexity of existing settlement infrastructure. 

Tokenisation enables real-time or near-instant settlement, reducing counterparty risk and operational friction. That potential, rather than extended trading hours, is where the real structural transformation lies. 

The hybrid path to institutional adoption of tokenisation

Despite frequent rhetoric about decentralisation replacing traditional finance, institutional adoption of blockchain technology has followed a far more pragmatic path. Now, tokenisation is being integrated within regulated markets rather than outside them. This hybrid approach combines distributed ledger technology with existing regulatory frameworks, supervised participants and established compliance structures. 

In the US, Nasdaq reportedly filed a proposal with the U.S. Securities and Exchange Commission in 2025 outlining its framework for tokenised equity distribution. Such initiatives indicate that market operators view tokenisation as an evolution of existing infrastructure rather than a parallel system. 

Globally, central banks and regulators are increasingly exploring how DLT could modernise financial market plumbing while preserving legal certainty and investor protection. However, as tokenisation gains traction, a new challenge is emerging: fragmentation. 

Fragmentation is becoming the real obstacle for tokenisation

Distributed ledger networks are multiplying rapidly across the financial ecosystem. Exchanges, banks, custodians, and technology providers are all experimenting with their own blockchain-based platforms, such as J.P. Morgan’s Kinexys. While this innovation is encouraged, it creates a new risk: incompatible systems. 

Major post-trade infrastructure providers – including DTCC, Euroclear, and Clearstream – have already warned that fragmentation across distributed ledgers could become a material obstacle to market efficiency. 

Technical standards alone will not solve this issue as capital markets operate within highly structured legal frameworks governing ownership rights, settlement finality, and cross-border transactions. If the legal architecture does not evolve alongside the technology, tokenised systems risk replicating the complexity of existing infrastructure rather than simplifying it. In other words, tokenisation is not just a technological transition, but also a regulatory and legal one. 

Europe’s strategic choice 

For European markets, these developments raise an important strategic question: where will the infrastructure of tokenised finance actually reside? 

If European investors primarily access tokenised equities through platforms developed and operated outside the region, Europe risks becoming a distribution market with a more limited oversight over its infrastructure. 

This is the scenario policymakers sought to avoid when introducing the EU DLT Pilot Regime, with the framework being designed to allow regulated financial market infrastructures to experiment with tokenised securities trading and settlement within a coherent legal environment. 

The initiative provides a controlled space where exchanges, central securities depositories and other regulated entities can develop tokenised market systems while remaining subject to existing investor protection and market integrity rules. 

But regulatory frameworks alone are not enough. Infrastructure must also be built, and without domestic platforms capable of supporting tokenised securities markets, European investors could end up relying heavily on systems developed elsewhere, particularly in the United States. That would represent a significant shift in the geography of financial market infrastructure. 

The overlooked transformation: post-trade 

Much of the public discussion around tokenisation focuses on headline-grabbing concepts such as 24/7 trading. While extended market hours may be attractive, they are not the most transformative aspect of tokenised finance. 

The real disruption lies in post-trade. Clearing and settlement processes have historically evolved around legacy technology and regulatory constraints, involving multiple intermediaries, reconciliation processes, and risk management structures designed to handle delayed settlement cycles. 

Tokenised infrastructure enables collapsing many of these layers into a single, synchronised system where ownership transfer and settlement occur simultaneously. If implemented correctly, this could reduce operational costs, eliminate certain counterparty risks, and simplify cross-border investment flows. 

However, achieving this outcome at scale, while remaining compliant with financial regulation, is far from straightforward. It requires deep coordination between technology providers, market operators, regulators, and legal frameworks. 

Tokenisation’s infrastructure moment 

The significance of developments such as the Nasdaq-Kraken initiative lies not in the crypto narrative often attached to them, but in what they signal about the direction of financial market infrastructure. 

Tokenisation is gradually being treated less as a digital asset experiment and more as a potential foundation for next-generation capital markets. But, that transition will not happen overnight. Markets evolve slowly, particularly when trillions of dollars of assets and decades of regulatory architecture are involved. 

However, the trajectory is becoming clearer. The institutions that control market infrastructure – exchanges, clearing houses, and post-trade service providers – are beginning to explore how distributed ledger technology can reshape the mechanics of securities markets themselves.  The current challenge is to ensure that this transformation occurs within coherent regulatory frameworks, interoperable systems, and competitive market structures. Capital markets are already under the influence of tokenisation. What is left is to see who will build and ultimately control the infrastructure that powers it.

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