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The BIS View on Tokenisation And What It Really Means
When people hear the word tokenisation, it can sound like another buzzword from the tech world. But when the Bank for International Settlements pays attention to something, it’s because it’s starting to matter for the actual financial plumbing. And their analysis of tokenised real estate is surprisingly grounded. This isn’t about hype. It’s about how ownership, credit, and liquidity are beginning to shift beneath the surface.
Where Tokenisation Is Emerging
The BIS points out that tokenised real estate doesn’t show up in luxury markets or high profile cities. Instead, it appears in the places traditional finance doesn’t serve well, neighborhoods with lower home prices, slower sales, fewer bank branches, and higher mortgage rates. These are areas where bank credit is scarce, where homes sit longer on the market, and where a little extra liquidity can make a real difference.
Their disaster analysis makes the pattern even clearer. After events like hurricanes or floods, trading in tokenised properties spikes sharply but only if the platform offers a buyback option. Where no buyback exists, liquidity gets worse. What this reveals is simple: tokenisation can create liquidity, but only because the platform itself steps in like a tiny balance sheet. It’s not magic. It’s a new type of intermediary taking on risk banks once carried.
In the BIS’s view, tokenisation is really just fractional ownership wrapped in 24/7 markets, supported by platforms that behave more like shadow banks than tech companies.
Where the BIS Thinks This Leads
If you zoom out, you can see why they’re focused on this. We’re entering a world shaped by aging populations, slower growth, and more cautious banks. At the same time, blockchain rails make it cheap to split assets into thousands of small pieces and let people trade them globally. Combine those forces and the BIS sees real estate evolving toward something like a streamable asset, a property divided into tokens, rent paid automatically through smart contracts, and secondary trading that looks more like equities than traditional housing transactions.
They also see tokenisation platforms gradually taking on bank like roles. If a platform promises to buy back tokens during stress, it becomes responsible for providing liquidity when everyone else pulls back. That’s exactly how shadow banks behave. And once the market becomes large enough to matter, regulators will follow. Liquidity backstops will be scrutinized. Disclosures will tighten. Capital requirements will appear. The BIS is already hinting that these platforms won’t be allowed to operate in a regulatory vacuum forever.
Over time, tokenised assets could become collateral in lending markets as well. That means leverage…margin loans, rehypothecation, structured products built on top of tokenised ownership. What begins as access becomes a new credit channel.
My Read on What’s Ahead
If you take away the jargon, the BIS is basically saying that tokenisation isn’t a fad. It solves real problems: slow settlement, high minimum investment sizes, geographic barriers, and the lack of financing in places banks no longer want to serve. That’s why it’s growing. And that’s why it’s going to keep growing.
The tradeoff is complexity. Tokenisation moves risk from banks into new platforms that haven’t been tested by a major downturn. Liquidity looks great on the way up, but only because the platform is often standing in the middle absorbing volatility. That works until it doesn’t.
Still, the direction is clear. Tokenisation will expand access, reshape who provides credit, and shift who owns the income streams of the physical world. The BIS isn’t predicting a dramatic revolution. They’re describing a quiet rewiring and that rewiring is already underway.
Does real estate #Tokenisation fill gaps in traditional markets? New research shows it enhances access to real estate and liquidity during shocks, but o[...]
The BIS View on Tokenisation And What It Really Means
When people hear the word tokenisation, it can sound like another buzzword from the tech world. But when the Bank for International Settlements pays attention to something, it’s because it’s starting to matter for the actual financial plumbing. And their analysis of tokenised real estate is surprisingly grounded. This isn’t about hype. It’s about how ownership, credit, and liquidity are beginning to shift beneath the surface.
Where Tokenisation Is Emerging
The BIS points out that tokenised real estate doesn’t show up in luxury markets or high profile cities. Instead, it appears in the places traditional finance doesn’t serve well, neighborhoods with lower home prices, slower sales, fewer bank branches, and higher mortgage rates. These are areas where bank credit is scarce, where homes sit longer on the market, and where a little extra liquidity can make a real difference.
Their disaster analysis makes the pattern even clearer. After events like hurricanes or floods, trading in tokenised properties spikes sharply but only if the platform offers a buyback option. Where no buyback exists, liquidity gets worse. What this reveals is simple: tokenisation can create liquidity, but only because the platform itself steps in like a tiny balance sheet. It’s not magic. It’s a new type of intermediary taking on risk banks once carried.
In the BIS’s view, tokenisation is really just fractional ownership wrapped in 24/7 markets, supported by platforms that behave more like shadow banks than tech companies.
Where the BIS Thinks This Leads
If you zoom out, you can see why they’re focused on this. We’re entering a world shaped by aging populations, slower growth, and more cautious banks. At the same time, blockchain rails make it cheap to split assets into thousands of small pieces and let people trade them globally. Combine those forces and the BIS sees real estate evolving toward something like a streamable asset, a property divided into tokens, rent paid automatically through smart contracts, and secondary trading that looks more like equities than traditional housing transactions.
They also see tokenisation platforms gradually taking on bank like roles. If a platform promises to buy back tokens during stress, it becomes responsible for providing liquidity when everyone else pulls back. That’s exactly how shadow banks behave. And once the market becomes large enough to matter, regulators will follow. Liquidity backstops will be scrutinized. Disclosures will tighten. Capital requirements will appear. The BIS is already hinting that these platforms won’t be allowed to operate in a regulatory vacuum forever.
Over time, tokenised assets could become collateral in lending markets as well. That means leverage…margin loans, rehypothecation, structured products built on top of tokenised ownership. What begins as access becomes a new credit channel.
My Read on What’s Ahead
If you take away the jargon, the BIS is basically saying that tokenisation isn’t a fad. It solves real problems: slow settlement, high minimum investment sizes, geographic barriers, and the lack of financing in places banks no longer want to serve. That’s why it’s growing. And that’s why it’s going to keep growing.
The tradeoff is complexity. Tokenisation moves risk from banks into new platforms that haven’t been tested by a major downturn. Liquidity looks great on the way up, but only because the platform is often standing in the middle absorbing volatility. That works until it doesn’t.
Still, the direction is clear. Tokenisation will expand access, reshape who provides credit, and shift who owns the income streams of the physical world. The BIS isn’t predicting a dramatic revolution. They’re describing a quiet rewiring and that rewiring is already underway.
Does real estate #Tokenisation fill gaps in traditional markets? New research shows it enhances access to real estate and liquidity during shocks, but o[...]