Guide / Markets

Tokenisation: what changes when an asset becomes a token?

Shared records and programmable transfers may simplify markets. The rights, institutions and settlement arrangements behind a token still determine what it is worth.

By Harley Chang · Published 8 Sept 2026 · Updated 11 Sept 2026 · 3 min read

A physical metal ingot in secure custody is linked to a separate digital representation.

Buying an asset can be much simpler than completing all the work behind the purchase. Records must agree, money must move and ownership must be recognised by the relevant parties.

Tokenisation proposes a different way to organise some of that work: represent an asset or a claim on a programmable platform so transfers and related instructions can be coordinated more closely.

The attraction is practical. If participants can reduce duplicate record-keeping or automate a conditional exchange, they may reduce delay and error. The important question is which parts of the existing process actually change.

The token and the claim

The BIS and CPMI's October 2024 report examines digital tokens and programmable platforms. It finds potential for lower transaction costs and new arrangements, while emphasising governance and risk management. Familiar financial-infrastructure risks still apply.

Consider a hypothetical token representing a claim on a warehouse's copper. The token may record a transfer between users. Whether the holder can collect copper depends on the claim's terms, the warehouse's obligations and the legal framework.

Changing the record does not settle those questions automatically. A careful evaluation starts with what the holder owns and who must deliver it.

The XRP Ledger supports issued tokens alongside its native asset, XRP. That gives developers tools for representing value, but a technical token format cannot establish the quality of every issuer's promise.

Coordinating both sides of a trade

An appealing design is to make an asset transfer conditional on the corresponding payment. If the conditions are met, both happen; otherwise the exchange should not complete.

That can address the uncomfortable situation in which one party pays while waiting for the other to deliver. But implementation matters. If part of the transaction depends on an outside institution, the platform still needs a dependable connection to that institution.

It is therefore useful to ask where the money sits, what form it takes and when a transfer becomes binding. “On a blockchain” is a description of infrastructure, not a complete description of settlement.

A better record needs a usable market

Tokenisation also does not guarantee buyers. Dividing a claim into smaller units may change how it can be held, but a holder still needs a counterparty and a workable route to sell or redeem it.

As an analytical test, compare a proposed arrangement with its existing alternative. Does it remove a reconciliation step? Make transfer restrictions easier to administer? Reduce a measurable delay? Or simply add another system to maintain?

Ripple is a technology company, XRP is a digital asset and XRPL is a public decentralised network. A project using XRPL does not, on its own, quantify demand for XRP. The stablecoin explainer offers a related example of why the promise behind a token deserves attention.

XRP for Newbies

Think of a claim ticket for something stored elsewhere. The ticket can change hands, but the item does not magically move into the ticket.

A token can work in a similar way when it represents a claim on a real asset. You need to know what the claim gives you, who honours it and how you can use it.

Tokenisation means representing assets or claims in a digital form that a platform can transfer and work with. Reconciliation means checking that different parties' records match.

Some tokens are issued on the XRP Ledger. XRP itself is the network's native digital asset, while Ripple is a separate company.

The useful test is whether the new arrangement makes ownership and exchange more dependable or efficient. A different-looking record is not enough by itself.