What tokenisation is and how it opens up new opportunities for companies and startups

What tokenisation is and how it opens up new opportunities for companies and startups

Tokenisation is the process by which an asset, whether tangible or intangible, is digitised through tokens on a blockchain network. In other words, it is like translating the value of a real-world asset into digital units that can be created, transferred and securely recorded in a decentralised registry. Each token is holds information about the asset it represents and who owns it, so that exchanging or transferring it is equivalent to buying or assigning a right or a fraction of the actual asset. Blockchain (a secure, distributed network made up of many nodes) ensures that all transactions are recorded and cannot be changed, as well as being easy to trace without the need for an intermediary, thus reducing both risk and management costs. A key aspect is smarts contracts, which are programmes that run on blockchain and control the rules they need to issue, exchange and manage tokens, automating processes without anyone having access to them.

What assets can be tokenised?

Virtually any asset can be tokenised, as long as what right this token represents is legally defined. We are talking about physical assets (cars, paintings, goods...), financial assets (shares in funds, stocks...) and even intangible assets (carbon credits, time spent on something, intellectual property...). For example, a gold bar stored in a safe could be tokenised, with each token being equivalent to a specific part. Or the right to exploit a patent. By dividing the value into a large number of digital tokens, tokenisation makes it possible for many people to be co-owners or investors in the same asset. Today, there are already examples of everything from real estate and art, to collectible wines, renewable energy or event tickets, proving that this technology is booming.

What are NFTs and what role do they play in tokenisation?

Among the different types of tokens, NFTs (non-fungible tokens) are the most popular. A NFT is a unique, unrepeatable and indivisible token that serves to represent a singular asset. Unlike a fungible token, which would be what we know as exchangeable currencies, each NFT has its own identity, and that is what differentiates it from the rest. Thanks to blockchain, the characteristics and history of each NFT are transparently recorded, allowing the originality and ownership of both digital and physical assets to be certified. This has opened up Pandora's box to new markets, for example, digital artists can tokenise their work to ensure that the buyer gets the real thing, not a copy. The same is true for video games, sports collectibles or music, where NFTs serve to sell exclusive items or creator's rights. In tokenisation, NFTs are the way to represent assets that cannot be exchanged for dozens of the same, from a recognised painting to an academic degree, by adding a verifiable digital scarcity. They have had a strong impact because they solve an increasingly common problem in the digital world, where until now copying a file was a piece of cake and made it worth less; with NFTs a price can be put on originality and a market for unique digital goods is created. Ultimately, they greatly expand the spectrum of tokenisation, allowing single securities to be digitised and traded securely.

Once it is clear what tokenisation means, it is important to underline why it is of such interest. Moving assets to tokens has a lot of advantages, both economic and operational, thanks to blockchain. If done well, it facilitates enforcement by embedding rules directly into tokens or associated contracts.

Access to new financing models

Tokenisation democratises investment. By dividing an asset into many tokens, people who cannot afford to pay for the whole asset can buy a part of it. For companies or projects, it means being able to attract capital from all over the world, without only banks being able to do so.

Fewer intermediaries and costs

Another plus point is that tokenisation does not require as many intermediaries, such as agents or notaries, because transactions can be direct between users through smart contracts. This greatly speeds up procedures, saves money and avoids errors or fraud. In finance, tokenisation could allow stocks or bonds to be bought and sold in a matter of seconds with greater privacy than at present.

Traceability, automation and regulation

Blockchain technology records everything without the possibility of erasing anything, allowing a token to be fully traceable from creation until it changes hands. This is vital in sectors where the chain of custody matters a lot, such as food or pharmaceuticals. In addition, automating with smart contracts means that processes that used to be done by people are now done on their own, with less risk and in less time. Last but not least, tokenisation can incorporate existing regulations, such as data protection or fraud prevention, from the outset, thanks to infrastructures such as ISBE in Spain. Thus, legality is guaranteed and operations are secure and auditable.

Although tokenisation is a global issue, here in Spain and Europe, projects are being considered that demonstrate its potential.

Green energy and GoO certificates

EU pushes blockchain to boost energy transition. In the past, obtaining GoO certificates certifying that electricity is renewable was a bureaucratic odyssey with many intermediaries. In 2019, Iberdrola took a step forward and made use of blockchain to prove that the energy it used was 100% renewable, making the process more efficient and transparent, without intermediaries slowing down the process. This guarantees the consumer that each kWh is unique and certified. Similar initiatives are emerging in Europe, for example, where residents with solar panels can sell their surplus directly with tokens, promoting sustainability.

Real estate and fractional tokenisation

Another area of focus for this technology is bricks and mortar. Tokenisation allows only part of the property to be purchased, lowering the barrier to investment. For example, a €200,000 flat could be divided into 2,000 tokens of €100 each, making it available to anyone with a small budget who wants a share of the property, and to take advantage of future returns. In Spain there are already platforms that manage everything from the legal framework to the distribution of rents, increasing the liquidity and transparency of a historically slow and inaccessible market. In Europe, there are also pilot projects such as REX, which show how to democratise this market while complying with financial rules.

Digital degrees and intellectual property

In academia, degrees and certificates are being tested and issued on blockchain, such that a degree is no longer just a voucher, but a verifiable online token, which prevents counterfeiting and facilitates international recognition. In Spain, for example, Master's diplomas have been issued which graduates can share with verifiable links in selection processes.

In intellectual property, Italy has taken a pioneering step by tokenising copyrights to manage licences and payments transparently and automatically. These cases open the door to new forms of exploitation and funding for digital content creators.

Looking ahead, asset tokenisation is one of those changes that can revolutionise the business landscape. As this technology and its regulation become more established, more and more companies will be able to tokenise to make their business model more attractive, seek new forms of financing or manage resources. We are talking about a paradigm shift that is quite reminiscent of the advent of the Internet. Everything related to blockchain and tokens serves to streamline previously complex processes.

Alternative financing for startups and SMEs

For startups and SMEs, tokenisation is like a breath of fresh air because it opens new doors to alternative financing. Instead of borrowing from the bank or dealing with traditional investors, a startup can fund itself by launching its own tokens, where each token represents, for example, a share of its future revenues or a stake in the company. It is similar to advanced crowdfunding, where investors from all over the world acquire these tokens with confidence in the potential of the project. The main advantage is that issuing and managing these tokens is much quicker and cheaper than the usual stock market processes.

European regulation, through regulations such as the MiCA Regulation, has laid the foundations for these schemes to develop with guarantees for all, anticipating an increase in so-called "Security Token Offerings" or STOs (processes in which a company issues and distributes digital tokens on a blockchain, which represent ownership of financial or real assets) in the coming years. Consequently, tokenisation will bring greater liquidity and dynamism to the entrepreneurial ecosystem, and this has been confirmed by the Eurosystem itself.

Automated processes for large companies

Large companies also have a significant opportunity to incorporate tokenisation into their internal operations and supply chains. A clear example in logistics management is converting goods or documents (such as delivery notes or production batches) into tokens within blockchain, allowing automated tracking along the entire chain, with smart contracts that execute actions when certain conditions are met. It reduces bureaucracy, prevents fraud and enables instant and reliable audits of the flow of goods. It also allows the automation of payments, dividend distribution and internal management between subsidiaries, adjusting balances in real time. Loyalty programmes convert points into tokens that are easy to exchange and trade.

Public asset management through tokens

Tokenisation also offers advantages for the public administration. An example in the medium term would be to issue tokens representing public assets or infrastructure to encourage citizen participation in their financing and use. Thanks to blockchain, the use of every euro can be tracked from its issuance to its final application, reducing embezzlement and increasing public confidence. Pilots are already up and running, issuing grant tokens that can only be spent under specific conditions through smart contracts. In addition, in Europe, the European Investment Bank issued a €100 million digital bond on blockchain in 2021, demonstrating that these technologies can manage public debt in a secure and modern way.

The tokenisation of energy reserves, CO2 emission quotas or cultural heritage is also being studied, allowing a more transparent and participatory management of assets. The trend suggests that these initiatives will strengthen trust and efficiency in governance as infrastructures such as ISBE and the European blockchain network consolidate.