Perhaps the biggest challenge with tokenisation in New Zealand at the moment is that many businesses are stuck between curiosity and action.
They can see international momentum building, but with New Zealand’s compliance landscape still being established, there’s hesitation around where to begin.
It’s understandable, but we don’t need to wait around for the starting gun. In fact, this is the perfect time to be building capability, testing use cases, and understanding where the technology genuinely fits.
The good news is that institutions don’t need to launch a fully tokenised product tomorrow to start preparing.
The most successful international examples tend to begin much smaller, and much more practically.
Step 1: Start with a problem, not the technology
One of the most common mistakes companies make is approaching tokenisation as a technology initiative first.
In reality, the strongest use cases usually emerge from existing operational pain points.
That might include:
- Slow subscription and redemption cycles involving multiple manual handoffs
- Fragmented fund administration between custodians, registries, and administrators
- Investor reporting that remains periodic rather than real time
- Repetitive onboarding and non-portable know your customer (“KYC”) processes
- Limited access to private markets due to high minimums or illiquidity
- Manual regulatory reporting processes
The key question is not, ‘how do we tokenise something?’ It’s, ‘where does our existing operating model create friction?’
This is a rule across many technologies and projects, and it’s especially relevant here when the unique underlying nature of tokenisation may be a distraction.
Step 2: Focus on contained use cases
Globally, early institutional adoption has generally focused on relatively controlled use cases rather than attempting wholesale transformation.
Some of the most common examples include:
- Tokenised fund units
- Private market access
- Secondary transfers of private assets
- Cross-border or offshore fund distribution
Many of these examples sit within permissioned environments, where access and governance are tightly controlled.
That matters because it allows institutions to explore the operational benefits of tokenisation while maintaining the oversight and safeguards expected within traditional financial markets.
For many New Zealand companies, tokenisation may initially work best alongside existing systems rather than replacing them entirely.
Step 3: Treat governance as part of the product
The World Economic Forum’s 2025 report on asset tokenisation notes that scalable adoption of tokenisation relies as much on governance, standards, and regulatory coordination as the technology itself.
Questions around legal ownership, custody arrangements, investor protections, and compliance frameworks need to be considered early, not retrofitted later.
That includes thinking through:
- Who legally owns the underlying asset?
- How is custody managed?
- What compliance obligations apply?
- How is investor data secured?
- How are transfers approved and recorded?
The institutions gaining traction internationally are typically the ones designing tokenisation within existing governance frameworks, not outside them.
Step 4: Pilot before scaling
Another clear lesson from overseas is the value of controlled pilots.
That might mean operating within a sandbox environment, testing a single product or investor segment, or running a limited institutional use case internally first.
The objective is not immediate scale. It’s learning.
Both of our previous articles on tokenisation mentioned the success of a Financial Markets Authority (“FMA”) sandbox, where four of six firms found a pathway to market for tokenised products. This is exactly the goal at this early stage.
Pilots help businesses understand operational impacts, identify compliance questions early, and build internal capability across legal, product, operations, and technology teams.
They also create institutional confidence, which is just as valuable.
Step 5: Define what success looks like
‘Defining success’ might smack of project management cliché, but it’s very true in this case, where tokenisation discussions can quickly become abstract unless businesses define measurable outcomes upfront.
That may include:
- Faster settlement times
- Lower operational costs
- Reduced manual processing
- Faster onboarding
- Improved investor experience
- More efficient compliance reporting
Without clear success metrics, it becomes difficult to separate meaningful operational improvements from technology experimentation.
What not to do
Internationally, there are also some consistent warning signs. The businesses that struggle are often the ones trying to:
- Replace entire systems too quickly
- Lead with hype rather than operational value
- Pursue open, uncontrolled environments too early
- Treat tokenisation as purely a technology project
- Ignore governance and compliance considerations until late in the process
The Australian Securities Exchange’s abandoned blockchain-based CHESS replacement has become a cautionary tale, demonstrating how large-scale transformation projects can struggle when complexity, governance, and implementation risk outpace practical delivery.
The lesson internationally has generally been to start small and scale gradually. The strongest projects tend to be well controlled and highly specific in the problems they are trying to solve.
The opportunity for New Zealand
New Zealand’s regulatory environment is still evolving, but the direction internationally is becoming increasingly clear.
For local institutions, the opportunity now is not necessarily to move first at scale, but to start building understanding, capability, and practical experience before adoption accelerates more broadly.
By the time the compliance landscape becomes fully mature, the institutions best positioned to move quickly are overwhelmingly likely to be the ones already learning today.
Tracey has been actively engaged in the digital assets space since 2021, building on over 20 years of experience across Australian superannuation and New Zealand financial services. That combination gives her a grounded perspective on where tokenisation creates genuine value for institutions versus where it adds complexity. Based in Auckland, she is actively involved with the New Zealand digital assets community through FinTechNZ, Blockchain NZ, and the broader adviser ecosystem.
