White Papers and Reports

Tokenisation: Evolution, Not Disruption

By Alexandre Delabre, Head of Product, Multifonds Global Investor

What does tokenisation mean for fund administration? In regulated funds, tokenisation is primarily a change in market infrastructure: distributed ledger technology (DLT) can record and share transactions, holdings and ownership across authorised participants, while the underlying fund, its assets, governance and regulatory obligations remain the same. Rather than replacing transfer agents or existing fund infrastructure overnight, tokenisation is more likely to develop through hybrid models that connect on-chain activity with established transfer agency and fund administration systems.

Key takeaways

• Fund tokenisation changes how ownership and transaction information is recorded and shared; it does not fundamentally change the underlying regulated fund or its assets.
• Tokenised fund shares are not the same as crypto assets. They remain regulated fund instruments, with DLT providing an alternative infrastructure for maintaining the ownership register.
• Hybrid on-chain and off-chain operating models are likely to dominate because distributors, investors, jurisdictions and market infrastructures will adopt DLT at different speeds.
• Tokenisation does not eliminate the transfer agent. KYC, AML, investor eligibility, register integrity, tax reporting and regulatory oversight still require accountable controls and governance.
• Simpler, high-volume products such as money market funds may be better suited to early tokenisation, while more complex fund structures are likely to use DLT first as a complementary or mirrored layer.

What is fund tokenisation?

Fund tokenisation is the use of distributed ledger technology to represent and maintain information about fund transactions, holdings, transfers and ownership across authorised market participants.

At its core, tokenisation is best understood not as the creation of entirely new assets, but as a change in how information is recorded, shared, and reconciled across market participants.

In the context of funds, this means using DLT to represent transactions, holdings, and transfers in a way that multiple authorised parties – transfer agents, administrators, custodians, and auditors – can rely on simultaneously. The underlying fund, its assets, governance, and regulatory framework remain unchanged. What changes is the infrastructure that supports the record of ownership.

Are tokenised fund shares the same as crypto assets?

No. Tokenised fund shares remain regulated fund instruments exposed to familiar underlying assets; DLT changes the infrastructure used to maintain and transfer the ownership record.

This distinction matters. Much of the current debate conflates tokenised fund shares with crypto assets, despite their very different risk profiles. Tokenised fund shares are still regulated instruments exposed to familiar assets; DLT is simply an alternative – and potentially more efficient – mechanism for maintaining the register.

Why will fund tokenisation develop at different speeds?

Tokenisation will not progress uniformly across the fund industry because the economic case, operational risk, regulatory requirements and readiness of market participants differ by use case and jurisdiction.

Tokenisation, like cloud computing before it, is not progressing uniformly. Certain applications move faster where the economic benefits are clear and the risks manageable. Others, particularly those touching core market infrastructure, advance more cautiously – and rightly so.

The history of market infrastructure change provides useful context. It took roughly 20 years for the industry to move from fax-based instructions to broadly standardised SWIFT messaging. That transition was not delayed by a lack of technology, but by the need for coordination across thousands of participants with different levels of sophistication, investment capacity, and regulatory obligations.

Blockchain adoption will follow a similar trajectory. While some distributors and platforms may be ready to operate fully on-chain, it may take many years before every distributor, jurisdiction, and investor is able – or required – to do so.

For that reason, hybrid models that connect traditional fund infrastructure with DLT are likely to dominate for the foreseeable future.

Does tokenisation replace the transfer agent?

No. In regulated funds, tokenisation changes how transfer agency controls are operationalised, but it does not remove the need for the transfer agent as the accountable gatekeeper of the shareholder register.

One persistent misconception is that tokenisation eliminates the need for the transfer agent. In practice, the opposite is more likely. As long as funds remain regulated, the role of the transfer agent as the controlled gatekeeper of the shareholder register remains essential.

Know-your-customer (KYC), anti-money laundering (AML), sanctions screening, investor eligibility checks, tax reporting, and compliance with local market rules do not disappear because a ledger is distributed. These functions require accountable entities, governance frameworks, and regulatory oversight. Tokenisation does not remove these obligations; it changes how they are operationalised.

In a tokenised environment, the transfer agent becomes the authority governing permissioned wallets. Not every wallet can, or should, interact with a regulated fund. Eligibility must still be enforced, registers must still be complete and accurate, and errors must still be resolvable. Public, permissionless access may be attractive conceptually, but regulated funds will continue to rely on permissioned models for the foreseeable future.

From this perspective, tokenisation can strengthen rather than replace the transfer agency function by embedding its controls more directly into on-chain activity.

How can traditional fund infrastructure connect with DLT?

A practical approach is to connect DLT networks with established transfer agency and fund administration platforms, allowing on-chain activity to be reflected within existing books, records and control frameworks.

This is where Multifonds sees its role evolving. Rather than forcing a wholesale migration to on-chain processing, Multifonds can act as a bridge between traditional fund infrastructure and emerging DLT ecosystems. By connecting to DLT providers and blockchain networks, Multifonds can mirror on-chain transactions within its established transfer agency and fund administration framework.

This approach offers practical benefits. It allows asset managers and distributors to experiment with tokenised issuance or distribution without abandoning proven operational models. It enables consistency between on-chain records and off-chain books and records, reducing operational risk while supporting innovation. Crucially, it recognises that market participants will move at different speeds – and that infrastructure must accommodate that diversity.

Which fund types are best suited to tokenisation?

Fund types with relatively simple structures, high transaction volumes and a natural link to digital cash may be the strongest early candidates for on-chain operating models.

Not all fund types are equally suited to on-chain models.

Money market funds are often cited as a strong candidate for tokenisation, and for good reason. They tend to have simpler structures, high transaction volumes, and a natural alignment with digital cash and near-real-time settlement. In these contexts, the benefits of atomic settlement – where the asset transfer and payment can occur together – extended operating hours, and reduced reconciliation are relatively easy to realise.

More complex funds, however, present greater challenges. Encoding nuanced fund rules, corporate actions, fee structures, side pockets, or jurisdiction-specific features into smart contracts is far from trivial. Legal, operational, and governance complexity quickly increases, and any error in code could have material consequences.

For more complex products, DLT may initially be better suited to a mirrored record or complementary layer rather than serving as the sole system of record.

What will fund tokenisation look like over time?

Tokenisation is more likely to become an evolutionary layer of market infrastructure than a sudden replacement for today’s fund operating model.

Tokenisation should therefore be viewed as an evolutionary step in market infrastructure, not a sudden revolution. Over time, we may stop talking about whether a fund is “tokenised” at all, just as we no longer refer to funds as “electronically registered” rather than paper-based. The technology will fade into the background as it becomes part of the market’s plumbing.

For now, clarity matters. Tokenisation is not one thing, it does not remove the need for trusted intermediaries, and it will not progress at a single speed. By embracing hybrid models, reinforcing the role of the transfer agent, and connecting traditional systems to DLT – rather than trying to replace them overnight – the industry can unlock real benefits while maintaining stability, trust, and regulatory integrity.

Connect with the author

Alexandre Delabre | LinkedIn

Last updated in Aug 2026.