Cambridge Uni Report: Tokenisation's Biggest Opportunity Lies in Emerging Markets

The tokenisation of real-world assets (RWAs) could help emerging markets deepen capital markets, broaden investor access and reduce financing costs, but only if governments modernise regulation, digital infrastructure and settlement systems, according to a new report by the Cambridge Centre for Alternative Finance (CCAF) and Financial Innovation for Impact (Fii).

The report argues that tokenisation has evolved beyond cryptoasset experimentation into a potential redesign of financial market infrastructure, with distributed ledger technology (DLT) increasingly being explored for traditional assets such as bonds, equities, commodities and real estate. Unlike advanced economies, where efficiency gains dominate the discussion, emerging market and developing economies (EMDEs) stand to benefit most from wider access to capital, lower intermediation costs and greater financial inclusion.

Drawing on research across 23 EMDE jurisdictions, surveys of regulators and interviews with policymakers and industry participants, the study says tokenisation is best viewed as a spectrum rather than a single model. It identifies four dominant approaches — native issuance, custodial, collateralised and synthetic structures — and argues that regulatory frameworks must assess not just the underlying asset but also token rights, custody arrangements, ledger design and settlement mechanisms.

The report finds a notable disconnect between regulators and industry. Market participants rated tokenisation as a high strategic priority and said they were ready to deploy it, while regulators viewed current market activity as limited despite acknowledging its long-term importance. Access to capital emerged as the primary driver for adoption among businesses, whereas regulators viewed tokenisation through the lens of financial sovereignty and reducing dependence on offshore markets.

However, the authors caution that tokenisation does not eliminate financial risks. Fragmented blockchain networks, weak secondary-market liquidity, legal uncertainty over ownership rights, cybersecurity vulnerabilities and inadequate investor protection could undermine adoption if left unaddressed. Existing securities laws in many EMDEs remain focused on primary issuance and provide limited clarity on custody, transfers and post-trade activities.

To unlock the technology's potential, the report recommends creating a "minimum viable ecosystem" comprising clear regulatory frameworks, robust settlement infrastructure, interoperable digital public infrastructure, and liquid secondary markets. It identifies real estate, public securities, fixed-income instruments and commodities as the asset classes most likely to achieve scale first because of their high intermediation costs and fragmented market structures.