Tokenisation puts the ownership record of an asset on a blockchain or other shared ledger. The asset itself, a Treasury bill or a money market fund unit, still sits with a custodian; the token is the legal or beneficial claim on it. Transfers happen by moving the token, and rules about who may hold it can be written into the token’s code.
The early gains are in collateral. A tokenised Treasury can move between counterparties around the clock and settle in minutes, which frees up capital that would otherwise sit idle waiting for market hours. DTCC’s first production use cases in 2026 were collateral pledges, repo and margin, for that reason.
The harder questions are legal and operational: whether the token confers the same rights as the underlying asset, what happens if the ledger fails, and who is accountable when a smart contract behaves unexpectedly. In security discussions the same word describes replacing sensitive data with a placeholder, which is a different technique.