Tokenization

A share in a company already exists as a record in a registry. Tokenization moves that record onto a blockchain, where transferring it is a transaction rather than a request to an institution that then updates its own books over the following days.

The asset does not change. A tokenized building is still a building, and someone still has to maintain it, insure it and hold the legal title. What changes is the plumbing of ownership: who can transfer it, how fast, in what size, and how many intermediaries have to agree.

What it is meant to fix

Settlement time. Traditional securities settle a day or two after the trade — a delay that exists because several institutions have to reconcile separate ledgers. On a shared ledger there is nothing to reconcile.

Minimum size. A commercial property is one indivisible asset costing millions. As a million tokens it can be owned in fractions, which opens it to investors who could never have bought the whole.

Trading hours. Markets close. Blockchains do not.

Where the argument gets weaker

The token is not the asset. It is a claim on the asset, and that claim is only worth what the surrounding legal structure makes it worth. If the company that issued the token fails, holding the token does not put you in possession of the building — you are a creditor, and which court hears your case may be genuinely unclear.

This is the gap between the technology and the promise. The blockchain settles the transfer reliably. It cannot enforce the ownership that transfer represents; that still depends on a legal system, a custodian, and a registry that agrees the token means what it claims.

Which is why the serious activity in tokenization has been in assets that are already heavily regulated and already have custodians — treasury funds, money market instruments — rather than in the property and fine art that make better headlines.

Note that the word is used for something else entirely in AI, where tokenization means splitting text into the units a model processes.