Tokenization of Financial Assets

11 Pages Posted: 7 Dec 2023 Last revised: 8 Mar 2024

See all articles by Xavier Lavayssière

Xavier Lavayssière

Université Paris 1 Panthéon-Sorbonne; International Monetary Fund (IMF)

Date Written: November 23, 2023


Tokenization is the issuance of financial assets in a digital form that minimizes the need for trust and legal guarantees in financial transactions. However, the degree of trust-minimization achieved depends on the financial, technical, and legal characteristics of the operation. Therefore, this paper provides an interdisciplinary analysis of tokenization to clarify the concept and its effect. We identify three key elements. First, the link between a token and its underlying asset, where we introduce the notion of direct tokenization. Second, the characteristics of the token and its infrastructures, where we establish their essential properties, sharedness and trust-minimization, rather than specific technologies. Third, the representation of ownership, with new models of custodianship and identification. In the strongest cases on these three elements, tokenization provides technical guarantees and legal certainty at any time. These characteristics inform regulatory efforts to minimize risks and facilitate the realization of the value proposition of tokenization.

Keywords: settlement, tokenization, finality, financial market infrastructures, Trust Minimization

JEL Classification: K23, G15

Suggested Citation

Lavayssière, Xavier, Tokenization of Financial Assets (November 23, 2023). Available at SSRN: or

Xavier Lavayssière (Contact Author)

Université Paris 1 Panthéon-Sorbonne ( email )


International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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