What is asset and company tokenization: a complete guide

Asset tokenization is the representation of rights over an asset (a share, a bond, a fund unit or a property) as tokens recorded on a distributed ledger, where its ownership and every transfer are recorded. It creates no new value: it changes how an existing right is recorded, transferred and held. That difference determines which rules apply.

The order matters: first the asset is classified and the vehicle is defined, and only then is the code written. That is the path of asset tokenization.

What tokenization is and what it is not

Tokenizing means recording the right over an asset in a system based on distributed ledger technology (DLT), so that each unit (the token) reflects a portion of ownership and its transfer is recorded in that ledger. The underlying asset still exists off-chain; the token is the representation of a right over it.

Two operations that sales language tends to mix up should be kept apart. Tokenizing an existing asset is one thing; issuing transferable securities in token form is another. The first may not involve an offering of financial instruments; the second does, and it is then governed by securities law. The line is drawn not by the technology but by the legal nature of the right being represented.

Nor is a token the same as a speculative cryptocurrency. A token of a fixed income fund records units of a regulated product; a utility token gives access to a service; an e-money token replicates the value of a fiat currency. Each category has its own regulatory treatment.

What four different meanings does the word tokenization have?

The word is used for four things that have nothing to do with each other: asset tokenization, the subject of this article; payment tokenization, which replaces the card number with a code; tokenization in language processing, which splits a text into units; and the sociological sense of “tokenizing” a person. It is worth telling them apart before going further, because most of the confusion starts here.

Asset tokenization

The subject of this article. Representing rights over an asset through entries on a distributed ledger, with effects on ownership and its transfer.

Payment tokenization

When you pay with your phone, the card number is replaced by a single-use code. There is no blockchain and no fractional asset: it is a security measure so that the merchant never sees the real number. This is the sense used by Visa, Mastercard or Stripe.

Asset tokenization vs. card tokenization. They share a name but have nothing in common:

Tokenization in language processing

In computational linguistics, tokenizing means splitting a text into minimal units so that a program can process them. It has no connection with finance beyond the name.

"Tokenizing" a person

A sociological use, linked to tokenism: including someone from an underrepresented group only to give an appearance of diversity.

Asset tokenization process, step by step

The process starts with a legal analysis of the asset and of the right to be represented, because that classification determines the applicable rules and the infrastructure that can be used. From there, operations rely on smart contracts that automate issuance, subscription, transfer and corporate events such as coupon or dividend payments.

• Structuring the asset. You define what is tokenized, in how many units, with which economic and voting rights, and under which legal regime.
• Issuance and recording. The tokens are minted and recorded in the DLT system, which becomes the source of truth for ownership and movements.
• Custody and transfer. The keys that control the tokens are held by an authorized entity, and transfers settle on the ledger itself, often almost immediately.

Near-instant settlement is the most tangible operational advantage: it shortens the subscription and redemption cycle and the reconciliation times between intermediaries. It does not remove the need for custody, audit or supervision; it moves them to a digital environment.

Step by step, a tokenization project usually runs through five phases:

1. Asset and right identification

Define the asset, the right the token will represent (income, an equity stake or a redemption right) and the vehicle that holds it, such as a company, a fund or a contract.

2. Legal fit

Determine whether the token is a financial instrument. If it is, MiFID II applies and, in Spain, so does Law 6/2023; the MiCA Regulation does not apply to it (Art. 2(4) of Regulation (EU) 2023/1114). If it is not, check whether MiCA applies. This phase decides the documents, authorizations and firms you need, and it is the core of our asset tokenization advisory.

3. Token model design

Technical and economic decisions:

• How many tokens will be issued?
• Which blockchain will be used? (Ethereum, Polygon, Avalanche, etc.)
• Which standard? (ERC-20, ERC-3643, ERC-1155...)
• Will there be liquidity or buybacks?
• Will it allow peer-to-peer transfers or require whitelisting?

4. Technology development

• Smart contract programming
• Integration with identity and digital signature systems
• Dashboard for the issuer and the investors
• Smart contract audit

5. Custody and governance

• Who holds the real physical or financial asset?
• What happens in the event of default, liquidation or sale?
• How are votes held or collective decisions made?

Legal framework in Spain and the EU

The starting point is the classification of the token. If the token embodies a financial instrument (a share, a bond, a fund unit, a derivative), it falls outside the EU crypto-assets regulation and is governed by securities law: Directive 2014/65/EU (MiFID II) and, in Spain, Law 6/2023, of March 17, on Securities Markets and Investment Services (BOE-A-2023-7053).

That Law introduces legal certainty rules for representing transferable securities through systems based on distributed ledger technology, alongside traditional book entries. When the securities are represented on DLT, the issuer must appoint an Entity Responsible for Registration and Recording (ERIR), which administers the register, identifies the holders and manages the events that affect the issuance (BOE-A-2023-7053). This role allows Spain to apply Regulation (EU) 2022/858, which sets up a pilot regime for market infrastructures based on DLT and has applied since March 23, 2023 (DOUE-L-2022-80826).

If the token is not a financial instrument (asset-referenced tokens, e-money tokens or other crypto-assets such as utility tokens), it falls within the scope of Regulation (EU) 2023/1114 (MiCA). The regulation itself excludes from its scope crypto-assets that qualify as financial instruments under MiFID II (Article 2(4), Regulation (EU) 2023/1114). That is why the first question is always classification: it decides whether the project follows the securities route or the MiCA route, not both at once.

In Spain, supervision falls to the CNMV, which authorizes both the entities that provide services on tokenized financial instruments and, where applicable, crypto-asset service providers under MiCA. The version in force of each rule should be checked in its official sources.

This section covers Spain and the EU. For US federal securities rules, see asset tokenization in the United States.

Real-world use cases in Spain

The Spanish financial sector has moved forward within regulated frameworks, and the verifiable milestones are more modest than the usual narrative of mass adoption.

As of October 16, 2026, the CNMV’s list of designated ERIRs contains a single entity, the investment firm Ursus-3 Capital, Agencia de Valores, which can record and administer issuances of tokenized securities under Law 6/2023; the oldest entry in its CNMV record is dated February 7, 2025 (CNMV, ERIR register).

In fund management, BBVA Asset Management announced on October 28, 2024 a tokenized short-term fixed income fund, recorded on the Allfunds Blockchain network and available only to the manager’s employees; according to BBVA, it was registered through the CNMV’s regulatory sandbox (BBVA, press release). In October 2025, Azvalor launched the Azvalor Blockchain FI fund, entered in the CNMV register on October 3, 2025 with BNP Paribas S.A., Sucursal en España, as depositary; according to its manager, it was developed within the same sandbox with Allfunds Blockchain (Azvalor, letter to investors for the second half of 2025), and according to an elEconomista article reposted by the manager, it was not open for distribution in that initial phase. The CNMV’s published table of sandbox projects lists neither fund.

Earlier, in July 2022, BME (through Iberclear), BBVA and the Inter-American Development Bank carried out the first issuance of a blockchain-registered bond admitted to a Spanish regulated market (BME, press release of July 26, 2022). These are limited, supervised operations, not retail products in widespread use.

Tokenization in Latin America: examples with an official registry

Latin America has no common framework: each country decides whether tokenization has its own regime and which public registry shows who is authorized. These five cases can be checked against the official source as of October 13, 2026.

• Argentina (CNV). The National Securities Commission created a tokenization regime in Title XXII of its Rules with General Resolution 1069/2025. Following General Resolution 1150/2026, the regime admits, among others, shares, corporate bonds (obligaciones negociables), CEDEARs, financial trust securities and closed-end fund units, including those issued under automatic authorization (Title XXII, Chapter I, art. 1), in a sandbox that runs until December 31, 2027 (art. 38). Only virtual asset service providers (PSAVs) registered in every category may take part (art. 14): the CNV PSAV registry lists 81 registered providers as of October 13, 2026, 34 of them in all five categories.
• El Salvador (CNAD). The Digital Asset Issuance Law (Legislative Decree 643, published on January 24, 2023) created the National Digital Assets Commission (art. 6). The Commission authorizes public offerings of digital assets, an authorized issuer joins its registry of issuers (art. 23), and service providers may only operate if they are registered with it (art. 18); registered entities are listed in its public registry. To tokenize a property, the CNAD regulation on the registry of issuers requires a company that owns the property, the property to be registered and free of liens, and a trust with a bank authorized by the Superintendency of the Financial System or, if the property is abroad, with a bank in that jurisdiction (annex E).
• Brazil (CVM). CVM Resolution 88/2022 governs investment crowdfunding, with a cap of 15 million reais a year per issuer (art. 3(I) and §3). In Circular Letter 4/2023/CVM/SSE (April 4, 2023), the CVM technical staff, in guidance that is not a rule, accepted that securitization notes issued by privately held securitization companies may be tokenized and offered, up to 15 million reais, on platforms registered under Resolution 88 (paragraphs 33 and 34). In 2025 there were 69 platforms, which closed 861 offerings for 3.9 billion reais, according to CVM Economic Bulletin 108.
• Mexico (CNBV and Bank of Mexico). There is no tokenization regime: the Securities Market Law does not mention distributed ledgers, the Fintech Law only admits the virtual assets the Bank of Mexico determines (art. 30), and its Circular 4/2019 limits fintech institutions to internal operations (provision 3) and only admits as virtual assets units that do not represent ownership of an underlying asset, or that represent it for less than its value (provision 4(I)). Crowdfunding of projects (debt, equity or co-ownership) is reserved to crowdfunding institutions (IFCs) authorized by the CNBV (Fintech Law, arts. 15 and 16): the CNBV register lists 26 as of October 13, 2026.
• Chile (CMF). The Fintec Law (Law 21.521) regulates services, not issuance: as a general rule, anyone providing services in Chile such as a crowdfunding platform or an alternative trading system must register in the Registry of Financial Service Providers and obtain CMF authorization (arts. 5 and 7). In Official Letter 76656 (April 27, 2026), the CMF found that a website that lets users trade tokens of rental real estate projects provides at least those two services. As of October 13, 2026, the CMF Registry of Financial Service Providers lists no authorized crowdfunding platform.

All 20 countries, with their law and regulator, are on the map of asset tokenization in Latin America.

Tokenization in the United States and by asset class

The rules above are those of Spain and the EU. These guides cover the United States and the most common asset classes:

• Asset tokenization in the United States: how to issue tokenized securities under federal law, with Reg D, Reg A+, Reg CF and Reg S compared, and the SEC’s interpretation of March 17, 2026, under which keeping a security’s records on-chain or off-chain does not change its nature.
• Real estate tokenization in the United States: the special purpose vehicle (SPV) that owns the property, the exemptions from SEC registration it relies on and tokenized offerings with public filings on EDGAR, the SEC’s filing system.
• Investing in tokenized real estate in Spain: what the investor actually buys (shares or debt of the vehicle that owns the property, not the building), how Spanish law protects them and the main risks.
• Real-world asset (RWA) tokenization: rights over real estate, debt, funds or commodities represented as tokens, with examples that can be checked in a public register.
• Regulation D (Reg D): the SEC rules that let a company sell securities in the United States without registering the offering, under Rule 504 or Rule 506.
• Regulation S (Reg S): the SEC rules for offers and sales made outside the United States, and how they work alongside Reg D in an offering with investors in the EU and the US.

Common mistakes

The first mistake is assuming that tokenizing avoids securities regulation. If the token represents a financial instrument, MiFID II and Law 6/2023 apply, with their issuance, recording and custody requirements, exactly as for a traditional security.

• Confusing the scope of MiCA with that of securities law, when the regulation expressly excludes financial instruments.
• Treating the custody of cryptographic keys as a purely technical matter, when it is a service subject to authorization and supervision.
• Assuming liquidity is automatic: a token is only liquid if there is a real market or redemption mechanism for the underlying asset.
• Relying on adoption forecasts from blogs or vendors instead of the rules and the CNMV’s official registers.

Frequently asked questions

Does tokenizing an asset automatically turn it into a transferable security?

No. It depends on the rights the token embodies. If it represents a financial instrument, it is governed by MiFID II and Law 6/2023; if it is not one, it may fall under MiCA. Legal classification comes before technology (BOE-A-2023-7053; Regulation (EU) 2023/1114).

What is an ERIR?

It is the Entity Responsible for Registration and Recording of securities represented through distributed ledger systems. It administers the register, identifies the holders and manages the events of the issuance. In Spain, the CNMV’s list of designated ERIRs contains a single entity, the investment firm Ursus-3 Capital, and the oldest entry in its record is dated February 7, 2025 (BOE-A-2023-7053; CNMV).

Does MiCA apply to tokenized funds or bonds?

No, when the token is a financial instrument. MiCA excludes from its scope crypto-assets that qualify as financial instruments under MiFID II, which remain subject to securities law (Article 2(4) of Regulation (EU) 2023/1114).

Can any company issue tokens representing its shares?

Only within the applicable framework. Issuing tokenized securities requires complying with securities rules and working with authorized entities (custody, ERIR, infrastructure). The EU pilot regime also sets size limits on the instruments it admits (Article 3 of Regulation (EU) 2022/858; DOUE-L-2022-80826).

What is a token and what is it for?

A token is an entry on a distributed ledger that represents a right. What matters is not the token, which technically is a ledger entry, but the right it embodies: that determines whether it is subject to securities rules or to a different regime. The classification is not chosen by the issuer and does not depend on the trade name; it follows from what is offered.

Which assets can be tokenized?

In practice it works where ownership is clear and the asset generates identifiable cash flows: real estate through the company that owns it, shares and equity interests in unlisted companies, debt, receivables, funds and investment vehicles, and commodities held in custody. It works poorly when ownership is disputed or when the legal form of the owner does not allow it to issue what is intended: membership interests in a Spanish limited liability company (S.L.) are not transferable securities and cannot be offered to the public as such. More detail in real-world asset (RWA) tokenization.

What does tokenizing a property mean?

It does not mean putting the building on a blockchain: the Land Registry keeps working the same way. What happens is that a company that owns the property is set up and its shares are represented as tokens. The registry still shows a single owner, the company, and the buyer becomes a shareholder in it, not a co-owner of the square meters. It is covered in how to tokenize a property in Spain.

How is it different from crowdfunding?

A crowdfunding platform is authorized as such and acts as an intermediary between project owners and investors, and what the investor receives is usually a position recorded in the platform’s own books. In a tokenized issuance, the investor receives a security whose ownership is recorded in a register with legal effect, and which can be transferred outside the party that originated it. We compare them in the differences between crowdfunding and a tokenization platform.

Does tokenization create liquidity?

Not on its own. Fractionalizing lowers the entry ticket and widens the pool of potential buyers, but it does not guarantee that they will show up. Liquidity requires a market where buyer and seller meet, and technology does not produce that. Promising liquidity without having organized it is one of the most repeated mistakes in the sector.

What it means for you

If you are considering tokenizing an asset or an issuance, the first decision is not technological but legal: determining whether the token will be a financial instrument. That classification determines the applicable rules, the authorizations needed and the providers you must work with. A prior analysis avoids structuring a project under the wrong regime and having to redo it.

This content is for information and training purposes only. It is not legal, tax or investment advice and does not replace consulting a qualified professional. The rules on tokenization and crypto-assets change; always check the version in force of the rules cited in the BOE (boe.es) and EUR-Lex (eur-lex.europa.eu).