A newly published survey of 22 EU and UK financial institutions suggests tokenisation is entering a more serious phase of development — but the industry’s progress is uneven.
While settlement technology is advancing quickly, interoperability remains at an early stage and regulatory divergence between the UK and EU is emerging as a structural challenge.
The findings, published by Reply and the Frankfurt School of Finance & Management, point to three areas that will determine whether tokenised markets can scale beyond isolated pilots.
Settlement takes priority as institutions focus on the cash leg
The survey shows institutions are concentrating on the settlement layer rather than the assets themselves. Some 86% of respondents identified delivery‑versus‑payment (DvP) settlement in central bank money as the most valuable use case for distributed ledger technology, ahead of custody, trading or securities‑financing. On‑chain payments were also rated highly, with 82% of institutions citing them as a preferred application.
This reflects where tokenisation has gained traction so far. The report highlights IMF data showing $300–350bn in daily tokenised repo volume across platforms — a sign that liquidity is forming first in markets where settlement speed and risk reduction offer clear benefits.
The launch of Pontes, the Eurosystem’s synchronised settlement mechanism linking DLT platforms with TARGET Services, is a key milestone. With DLT‑issued securities now eligible as Eurosystem collateral, institutions have a regulated path to settling tokenised instruments in central bank money. The survey suggests this is shifting attention from token creation to the infrastructure required to support secondary‑market activity.
Interoperability emerges as the main barrier to scale
Despite growing interest, the survey reveals a significant maturity gap in the systems needed to connect tokenised markets. Only one institution reported being fully mature in interoperability, even though most respondents rated it as a critical capability.
The lack of common standards is the most frequently cited barrier to adoption. Some 68% of institutions pointed to missing market infrastructure and industry standards, while 41% highlighted integration complexity. According to the report, these issues are closely linked: differences in token formats, wallet interfaces and settlement messaging mean every connection to core banking systems or counterparties requires bespoke integration.
This fragmentation limits the development of secondary‑market liquidity. Although issuance processes are becoming more routine, the survey notes that tokenised instruments risk remaining isolated unless platforms can interoperate and share common rails. The launch of Regulated Layer One (RL1) — a permissioned DLT network created by ten European institutions — is one attempt to address this, but the report suggests broader alignment will be needed.
UK–EU regulatory divergence becomes a design challenge
Regulation is another area where institutions see both progress and complexity. The report notes that regulatory readiness is the capability respondents consider most important, yet 75% have not mapped the differences between UK and EU frameworks.
The UK’s new cryptoasset regime opened its authorisation gateway on 30 September 2026, with the rules taking effect from 25 October 2027. The FCA has set out a detailed perimeter covering stablecoin issuance, trading platforms, safeguarding, dealing, arranging and staking. Existing registration under anti‑money‑laundering rules will not automatically translate into permission under the new framework.
In the EU, the European Commission’s targeted consultation on the MiCA review closed on the same day. Outputs are due by 30 June 2027, and may lead to legislative proposals affecting stablecoins, crypto‑asset service providers and the scope of the DLT Pilot Regime. Tokenised securities continue to fall under MiFID II and CSDR, creating a different regulatory path from the UK.
The report argues that firms operating across both markets will need to treat regulation as a design parameter rather than a final compliance step. Authorisation applications must describe real systems and controls, meaning decisions on custody, integration and operating models cannot be deferred.
A decisive period ahead
The survey depicts a market moving from experimentation towards implementation, but with critical gaps still to close. Settlement infrastructure is advancing, interoperability remains limited, and regulatory divergence is widening.
With major regulatory deadlines in 2027, and Pontes targeting 24/7 multi‑currency settlement in 2028, institutions face a narrow window to align technology, standards and regulatory strategy. The next phase will determine whether tokenisation can support connected, liquid markets — or whether progress remains confined to individual pilots.
The full survey results can be found on the Frankfurt institution’s website.
