Recent developments have made evident that the needle on tokenization is moving: it has graduated from siloed conversations between technology companies and financial institutions to something that regulators and governments are beginning to implement.
In India, this shift is becoming particularly visible: SEBI recently announced its “Demat 2.0” pilot for tokenised corporate bonds, while at the Global Fintech Fest 2026, tokenisation was emphasised for its ability to shape the next phase of financial innovation. Maharashtra has also announced the proposed DELTA Act, which seeks to create a legal framework for tokenising land and other immovable assets.
These developments raise an important question: What needs to exist around a token for it to become a trusted and investable financial product?
A recent paper by MNA Ventures Research, “Beyond Tokenization: Building Trusted Digital Capital Markets”, places this question at the centre of its analysis. It highlights that the next phase of tokenization should focus less on what can be tokenized and more on what infrastructure is required for tokenized assets to become trusted, liquid and institutionally usable markets. Its core thesis is plainly stated: Tokenization digitizes assets. Digital capital markets digitize financial ecosystems.
A token is not a market
Consider a ₹100 crore corporate bond. In a traditional market, the bond is supported by issuance rules, ownership records, custody arrangements, distribution channels, trading systems, settlement mechanisms, disclosures and investor protections.
Representing the same bond as a token may make it easier to transfer or allow certain processes to be automated. However, it does not automatically answer important questions: Who legally owns the bond? Who can buy it? What happens if the issuer defaults? Which record establishes ownership? Can investors sell it easily?
The paper is explicit in calling out the gap between technical feasibility and institutional readiness: Tokenization changes the way an asset is represented and transferred. It does not automatically create the infrastructure needed for a functioning market.
Legal rights must come first
A token showing control over a digital asset does not necessarily establish what its holder legally owns. For example, a token linked to property could represent direct ownership, an interest in a company that owns the property, or a contractual claim connected to the property’s value. These structures carry different rights.
The same principle applies to financial assets. Investors must understand the legal claim represented by a token and the protections available to them. This becomes more complicated when assets move across borders, because blockchain networks may be global while ownership, insolvency and investor-protection rules remain jurisdiction-specific.
In this light, the paper makes a key observation: putting an asset on a global network does not make the underlying legal rights global.
Transferability is not liquidity
Another important distinction the paper makes is between transferability and liquidity. Suppose a token can be transferred between two digital wallets in five seconds. That does not itself mean the asset is liquid. Liquidity also requires deeper market characteristics, such as the ability to find willing participants wanting to transact and create a secondary market for tokens. A tokenised corporate bond could therefore be technically transferable but still have very little trading activity.
This matters because tokenisation is sometimes judged by how much value has been tokenised. But a large amount of tokenised assets does not necessarily mean that a functioning market has developed around them.
Asset and money layers must work together
A securities transaction involves both an asset and the money used to pay for it. If a bond moves instantly but payment continues through a separate and slower system, the transaction remains constrained. This is why tokenised securities are increasingly being explored alongside tokenised deposits, central-bank money and other digital settlement arrangements.
Tokenised assets represent investment claims. Tokenised money facilitates payment and settlement. The paper highlights that both layers need to develop together for a truly digital capital market.
Observability is infrastructure
Blockchains can make transactions visible, but visibility does not necessarily mean that the market can be understood. A tokenised bond represented across multiple networks may have transaction data spread across different systems. Investors and regulators may still struggle to determine the total supply, ownership patterns, trading activity and governing jurisdiction.
The paper distinguishes between transparency and observability. Transparency means information can be seen. Observability means that information provides enough context to understand what is happening across the market.
As tokenised markets grow, observability must become infrastructure in its own right.
What should India measure?
The paper proposes a seven-layer framework covering legal and regulatory foundations, asset issuance, custody, market access, settlement, market intelligence and institutional trust.
These layers point towards five basic questions for evaluating tokenisation initiatives:
- Can institutions legally own the asset?
- Can they access and exit the market?
- Can transactions settle safely?
- Can investors and regulators understand market activity?
- Can institutions trust the technology and operating environment?
These questions are relevant as India moves from tokenisation experiments towards implementation. SEBI’s Demat 2.0 pilot and Maharashtra’s proposed DELTA Act involve different asset classes, but both raise the same underlying issue: how should digital representations fit into existing legal and market infrastructure?
The success of tokenisation should therefore not be measured only by the number of assets placed on a blockchain. The greater opportunity lies in making those assets legally recognised, accessible, liquid, safely settled, observable and trusted.
What India needs to keep in mind is that tokenisation is the beginning of digital capital markets, not the end state.