When Simeon Willis, Chief Investment Officer at XPS Pensions Group, began digging into tokenisation and digital assets last year, it wasn’t because of industry hype or a conference epiphany.
The shift came, he says, “walking home from work with a friend who works in trading for a big US house,” where a simple observation reframed his understanding of modern markets: “people just don’t realise what a manual process trading financial assets is”.
Investors assume that because they click a button on a portal, the entire process is digital. “But it’s not,” Willis says. Even when trades net internally, the underlying system remains slow, fragmented and expensive. “It’s an entirely manual process between organisations… and it’s expensive because you’ve got somebody involved in all these trades.”
For Willis, who has 25 years’ experience in the sector, this inefficiency is not just an operational quirk. It is the foundation of why tokenisation matters — and why institutional investors will eventually have no choice but to understand it.
Status quo
The current system relies on multiple ledgers, intermediaries and reconciliations – all relying on people and distinct, specific systems. Tokenisation removes that.
“If you move away from this traditional finance system… into a system where you don’t need to have reconciliation because there’s one system you’re dealing with… you save a huge amount of trading costs, and you save a huge amount of time within the settlement,” says Willis.
For institutional investors, Willis argues, this is not a marginal gain. It is structural. Faster settlement, lower friction and fewer failed trades directly affect treasury operations, liquidity management and execution quality.
He also highlights the impact on minimum trade sizes — a long‑standing constraint for pension schemes, insurers and personal pensions. “There’s a size where it is just not worth somebody’s while trading that security because it’s just too small relative to the cost,” he says.
Remove the cost, and the market opens. “It can transform the way people trade… you could have a segregated portfolio… implemented for even say a £1,000 investment because they just buy a little token of this and this and this.”
For institutional investors, that means more granular exposures, more tailored portfolios and more efficient implementation — without the drag of legacy trading costs.
Tokenisation — not crypto — is the institutional pillar
However, Willis is clear that tokenisation must be separated from the speculative crypto narrative and the question marks hanging over other parts of the rapidly developing digital ecosystem.
“Cryptocurrencies… they’re not necessary… they don’t need to exist,” says Willis. “They’re a product to the digital markets, not a required pillar.” Stablecoins, too, he says, are not essential, pointing to tokenised deposits as an alternative route. CBDCs may emerge, but he notes that central banks have already demonstrated ability to issue currency electronically: “It’s not immediately obvious,” he says, that CBDCs will be transformative.
Tokenisation, however, is different. “That is the one,” Willis says. “It’s the traditional investing world, but just accessible to everyone.”
For institutional investors, the implications are clear: private markets become more liquid; minimum sizes fall; diversification improves; and operational burdens shrink. “It converts illiquid assets to being more like a listed one,” he says — a shift with clear relevance for pension schemes, insurers and fiduciary managers.
So why the delay?
Despite the scale of change, Willis sees limited institutional engagement. “I don’t think everyone who needs to realise has realised that they will need to learn this eventually… This is coming.”
But he also understands why. “It really wouldn’t make that much difference today, because there’s nothing for them to buy yet. This isn’t ready.” With regulatory change, geopolitical risk and the AI boom dominating agendas, tokenisation feels distant.
Yet the moment it becomes investable, he argues, the benefits will be immediate: “more tailored, more diversified, more access to private markets”.
And the industry is moving. Conferences are becoming less cryptic. Jargon is slowly receding. The serious players are coalescing.
Institutional investors may be the last to act — “because they always are, the products come first” Willis says — but they will not be able to avoid it in the long term.
Waiting for the iPhone moment
Willis expects adoption to be product‑driven. “At some point there’ll be little tipping points… like Apple bringing out the first iPhone. Someone’s going to bring out something that’s going to make everyone think: that is the thing to have.”
He notes how the first wave is coming from money market funds — the most frequently traded institutional asset class – and how they, in tokenised form, can be used more effectively is likely to hit the industry significantly.
“Getting half a day’s interest rather than not getting half a day’s interest starts to rack up.” For insurers, he notes, “you can often have very large amounts of money moving around, so if that business can just tap a little bit more of the interest it becomes interesting. That’s why money market funds have become the first area of focus.”
Pension schemes will follow later. “They don’t trade that often… but it’s still a benefit to be had.”
Getting ahead before the wave hits
He expects adoption to accelerate rapidly: “I’m expecting the thing to double.”
And he wants XPS positioned early. “We want to be there in front of it. It’s like surfing. We’re paddling before the wave, waiting for the wave, wanting to catch it.”
For Willis, tokenisation sits in a rare space: “A mixture of nonsense and… perfect genius waiting to be discovered.” And institutional investors, he says, will soon need to understand both.
He will bring that perspective to Capital Pioneer DAS 2026, returning as a speaker after attending as a delegate in 2025 — and after a year spent producing one of the UK market’s clearest institutional explorations of tokenisation.
To access XPS’ full series on digital assets, visit its website.
To attend Capital Pioneer DAS on September 21, visit our website or contact events.team@rhoticmedia.com
