31 March 2026
In March 2026, Hein Tibosch spoke on behalf of Flow Traders at a Eurofi panel on technology and crypto in the SIU. For this occasion, the following article was published in Eurofi’s The Views magazine.
Financial markets are rapidly adopting tokenization: shares, bonds, cash, and other real-world assets are increasingly issued and settled as tokens on a blockchain. Rights and transfer rules are coded into the token, and the blockchain unifies records across participants into a synchronized ledger. Thus, issuance, transfer, and settlement are streamlined and automated on shared rails. This cuts operational silos and speeds up execution, with clear benefits for retail investors. Intelligent regulation will secure Europe’s global leadership in the market shift; counterproductive regulation will push Europe to the sidelines.
The foundation for this new, tokenized, market infrastructure is blockchain technology. A blockchain is a decentralized ledger run by independent actors verifying transactions against established rules. Once validated, entries are immutable. Since blocks are cryptographically chained, changing a past block demands rewriting all later blocks and securing consensus to rewrite the history. As a result, the ledger is inherently secure, transparent, and resistant to fraud.
Another core feature of blockchain-based infrastructure is near-instant, atomic settlement. Delivery-versus-payment and delivery-versus-collateral execute simultaneously on an all-or-nothing basis: transactions either complete in full or not at all. The result is materially lower counterparty risk and shorter exposure windows; the infrastructure offers inherent operational efficiency.
The contrast with traditional infrastructure is clear. Layered intermediaries introduce delays, errors, and costs. Settlement cycles tie up capital, and cross-border constraints and limited hours add operational frictions. Moving markets on-chain mitigates these inefficiencies by unifying these layers into a single workflow. Smart contracts replace manual reconciliation and stepwise handoffs and embed safeguards and conditions within tokens, all while maintaining clarity of rights and obligations. Continuous operations enable faster liquidity and more flexible position management; fractionalization reduces minimums and widens access. For retail investors, this means settlement in minutes (versus T+2/T+3), 24/7 market access, and minimum investment amounts as low as €10–€100.
As a regulated market maker across tokenized venues, we see these efficiencies emerging in real time. However, tokenized market infrastructure is still evolving. Liquidity is fragmented across chains and venues, resulting in thin secondary markets and uneven price discovery. Although more assets are being tokenized, issuance growth by itself won’t build depth. Market microstructure and liquidity provision are essential, yet current market‑making requires heavy pre‑funding across platforms and chains, immobilizing capital and limiting scale. The immediate needs: interoperability and capital efficiency.
For tokenized markets to mature, the regulatory approach becomes pivotal. Policy decisions will determine where tokenized-market liquidity forms and where retail benefits materialize. With jurisdictions competing for tokenized infrastructure and flow, Europe must provide clear, proportionate rules to make issuance, custody, and trading predictable and scalable. Specific consideration is needed for tokenization’s distinct structural features: programmability, collateral mobility, settlement finality, and continuous trading. To guarantee investor protection, new rules should reflect the true risk profile of these features, rather than rely on traditional comparisons.
While the debate often centers on permissioned versus permissionless networks, in practice, investor protection is primarily driven by governance, custody, and risk controls. To safeguard investors regardless of how innovation evolves, MISP should be technology‑neutral and enforce consistent rules on custody, disclosure, and risk controls. This means clear rules for tokenized issuance, transfer, and settlement; extending the DLT Pilot; MiCAR‑grade safeguards (client asset segregation, operational resilience); standardized DvP and identity frameworks; and responsible retail access with robust disclosure.
Clear, consistent regulation will let on‑chain markets scale responsibly, deepen retail participation, and boost efficiency and competitiveness. With predictable and proportionate rules, Europe can offer the world’s lowest‑friction environment for tokenization. That clarity will attract infrastructure, concentrate liquidity, and catalyze innovation. This will make Europe the starting point for global tokenization, and establish it as the world’s leading financial hub.