Tokenization enters the execution phase within regulated market infrastructure
As tokenization enters its execution phase, attention is shifting from digital assets to the market infrastructure that supports them. Richard Baker, Founder and CEO of Tokenovate, explores recent developments from systematically important infrastructures and what this means for the future of capital markets.
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Richard Baker, Founder and CEO of Tokenovate
- March 23, 2026
- 4 minutes
Until recently, tokenization efforts have largely concentrated on the digital representation of assets and payments. There is now a growing recognition that tokenized instruments deliver value only when supported by coordinated settlement processes, interoperable systems and clear legal finality.
The start of 2026 marked a decisive shift, as tokenization moved from experimentation to execution. Technologies once confined to pilots are now being deployed within settlement, funding, and post-trade workflows at systemically important market institutions.
Recent developments at NYSE, LSEG, Swift and Lloyds demonstrate that tokenization is rapidly becoming an important component of how markets settle, move value and manage risk.
From experimentation to infrastructure
For much of the past decade, tokenization has been framed as a future transformation of financial markets, promising faster settlement, greater efficiency and reduced risk.
However, it has mostly been confined to pilots and controlled experiments, operating on the periphery of the financial system.
In 2026, it has become clear that the landscape has shifted.
Tokenization is now being deployed within core market infrastructure, including deposits, settlement processes and exchange operations. Importantly, this deployment is concentrated in post-trade layers where settlement finality, liquidity management and counterparty risk are actively controlled.
Where earlier interest focused on technological capability, current adoption is driven by its ability to operate within live settlement, funding and risk management processes. This development is being led by institutions subject to the highest levels of regulatory scrutiny, indicating a considerable shift in the institutional legitimacy of tokenization.
Early developments in 2026
Systemically important institutions are now integrating tokenization directly into existing regulatory, legal, and operational frameworks. Early 2026 has already brought a wave of announcements signaling a structural shift.
Banking cooperative and messaging network Swift recently announced plans to develop a blockchain-based ledger to advance coordinated exchange and settlement of tokenized assets and cash across existing market infrastructure.
Simultaneously, Lloyds Bank executed the first regulated transaction using a tokenized commercial bank deposit on a public, permissioned blockchain. The process involved issuing the tokenized deposit before purchasing a tokenized gilt, with proceeds subsequently redeemed into a traditional bank account. This marks a significant milestone, demonstrating how tokenized commercial bank money can operate within regulated frameworks while remaining fully integrated with traditional bank balance sheets.
The New York Stock Exchange (NYSE) has sought approval for a 24/7 digital trading platform that would support tokenized equities and continuous settlement. The proposal outlines the intention to utilize tokenized securities alongside traditional securities, indicating a deliberate and meaningful integration with established market infrastructure without altering long-standing principles. It also reflects a recognition of the market’s need to evolve, with tokenization offering a solution by enabling on-chain settlement, continuous funding and real-time management of intraday liquidity and counterparty exposure.
The London Stock Exchange (LSEG) has followed suit by launching its own blockchain-based Digital Settlement Network. It enables synchronized, near-instant settlement of cash and securities across multiple jurisdictions and currencies, shortening counterparty exposure windows by replacing batch-based settlement cycles with near-instant settlement finality.
Five years ago, the thought of two of the world’s largest stock exchanges embedding tokenization within live trading and settlement environments was a pipe dream. The fact that it’s real and happening now reflects both the technology’s readiness and its acceptance as a credible, regulated instrument within systemically important market infrastructure.
Banks, exchanges and market utilities are designed to prioritize stability over innovation. Therefore, their decision to adopt tokenization as a genuine solution reflects confidence in its long-term regulatory and operational viability.
The impact on market infrastructure
The integration of tokenization into live market infrastructure introduces several tangible operational changes. Its immediate impact is to enable faster, more efficient settlement whilst reducing post-trade risk. By reducing prefunding requirements and trapped collateral, it also improves effective market liquidity.
Interoperability across multiple ledgers and platforms will be essential, alongside legal and regulatory clarity on asset classification, settlement finality, and cross-border consistency.
Ultimately, success will be measured by the industry’s ability to operate continuous, scalable settlement with automated post-trade processes under existing regulatory regimes. Achieving that outcome will require collaboration through synchronized systems, shared standards and sustained regulatory alignment.
