The International Organization of Securities Commissions (IOSCO) has published a final report on the tokenization of financial assets, setting out how distributed ledger technology is being used in capital markets and the implications for market integrity and investor protection. The report aims to help IOSCO members develop effective regulatory responses as tokenized products and related infrastructure evolve. Prepared by IOSCO’s Fintech Task Force, the analysis draws on reviews of commercial use cases including tokenized money market funds and fixed income instruments, as well as engagement through industry and academic roundtables. It finds that tokenization is growing but remains nascent, with scalability constrained by interoperability issues and a lack of credible settlement assets; potential efficiency gains such as shorter settlement cycles and improved collateral mobility are uneven because many processes still rely on traditional infrastructure. The report highlights that legal uncertainty, operational vulnerabilities and cyber risks remain central but can manifest differently in DLT settings, while regulatory approaches differ across jurisdictions, ranging from applying existing frameworks to issuing new guidance, sandbox programmes or bespoke requirements; IOSCO encourages members to apply its policy recommendations for crypto and digital asset markets and for decentralized finance to tokenized financial assets under the principle of “same activities, same risks, same regulatory outcomes”.

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