Is Tokenization Set to Transform the Global Economy?

Insights from the World Economic Forum 2026 Panel Discussions

                    Source: Generative AI

Introduction: From Buzzword to Building Block

In the last ten years, tokenization has moved from a small blockchain experiment linked to cryptocurrencies to a main topic for policymakers, regulators, and CEOs. At the World Economic Forum 2026, it was seen as a major change in how value is created, stored, transferred, and managed—not just speculation.

Panels at Davos focused on a central question:

Is tokenization the future of finance and the real economy, or simply another technological trend?

This article examines whether tokenization is the future, drawing on key ideas, debates, and agreements from the WEF 2026 panel discussions.

What Do We Mean by Tokenization? (A Practical Definition)

Tokenization is the conversion of real-world or financial assets into digital tokens on a blockchain or distributed ledger. These tokens can stand for:

• Financial assets (equities, bonds, funds)
• Real assets (real estate, commodities, art)
• Intangible assets (carbon credits, intellectual property)
• Rights and utilities (voting rights, access rights, revenue shares)

At WEF 2026, panelists pointed out an important difference:

Tokenization is not focused on crypto speculation; it is about building financial infrastructure.

The real benefits are efficiency, programmability, transparency, and accessibility, not price swings.

Why Tokenization Took Center Stage at WEF 2026

Three global trends made tokenization a big topic at Davos:

Old financial systems are still fragmented, slow, and expensive, especially for cross-border transactions, settlements, and reconciliations. Tokenization offers:

• Near-instant settlement
• Reduced counterparty risk
• Lower operational costs (The Impact of Distributed Ledger Technology and Tokenization in Fixed Income Issuance, n.d.)

2. Demand for Financial Inclusion

Panelists said tokenized assets could make investing easier, allowing people to own fractions of assets and letting more investors join in—something usually limited to big institutions. (What is 'tokenization'? How does it make investing easier? (2026)

3. Programmable smart contracts let assets include rules like automatic compliance, dividend payments, or transfers based on conditions. This is changing how markets work. (Vaziry et al., 2026)

The WEF 2026 Consensus: Tokenization Is Inevitable—but Not Uniform

A main takeaway from WEF 2026 was that most panelists agreed on where tokenization is headed, but they had different views on how fast and how far it will go. Globalization in capital markets is expected to grow a lot. (Global Economic Prospects, January 2026)

• Institutional adoption will lead to retail adoption.
• Regulation will shape success more than technology.

Where Opinions Diverged

• Will public or permissioned blockchains dominate?
• How fast can regulation adapt?
• Will tokenization replace or merely augment existing systems?

Among the areas discussed, capital markets tokenization stood out as one of the strongest use cases at WEF 2026. (Rooz, 2025)

Key Benefits Highlighted

• T+0 settlement instead of T+2/T+3
• Real-time transparency of ownership
• Reduced reliance on intermediaries
• Lower post-trade reconciliation costs (Kunthu et al., 2025)

Panelists from global banks and exchanges noted that tokenized bonds and funds are already being issued in controlled environments. The focus has shifted from whether tokenized securities will scale to how quickly they will. (Tokenization and Compliance: Building AML/KYC-Ready Infrastructure, 2025)

“We are not tokenizing assets for novelty—we are tokenizing inefficiencies.”
— WEF 2026 panelist, Global Investment Bank CEO

Real-World Assets (RWA): Unlocking Illiquid Markets

Tokenization of real-world assets was presented as a structural breakthrough. (Davos Forum Concludes: Tokenization Emerges as Hottest Topic, Industry Leaders Bullish on 2026 Super Cycle, 2026)

Examples Discussed at WEF

• Fractional ownership of commercial real estate
• Tokenized infrastructure projects
• Commodity-backed tokens
• Carbon credits and environmental assets

These assets traditionally suffer from:

• Illiquidity
• High minimum investment sizes
• Limited transparency

In summary, tokenization could turn traditionally illiquid assets into tradable, divisible, globally accessible instruments—if legal ownership ties to digital tokens are clearly established. (Borjigin et al., 2025)

Technology provides the foundation, but WEF 2026 discussions showed that regulation remains central to progress. (Is Tokenization the Future? | World Economic Forum Annual Meeting 2026, 2026)

Regulatory Themes That Dominated

• Legal recognition of tokenized ownership
• Custody and investor protection
• AML/KYC embedded into smart contracts
• Jurisdictional harmonization

A key insight: Tokenization will succeed by embedding regulatory requirements into code, not by bypassing them. (Vaziry et al., 2026)

Panelists stressed “compliance by design,” where regulatory rules are enforced automatically through programmable assets. (Vaziry et al., 2026)

Central Banks, CBDCs, and Tokenized Money

Another major WEF 2026 discussion point was the intersection of:

• Tokenized assets
• Central Bank Digital Currencies (CBDCs)
• Wholesale settlement systems

Panelists noted that without tokenized money, tokenized assets lose much of their efficiency. Many argued that CBDCs or tokenized deposits are crucial for a fully tokenized financial ecosystem. (Zhang, 2026)

This integration could:

• Enable atomic settlement (asset vs money)
• Reduce systemic risk
• Improve monetary policy transmission. (Kunthu et al., 2025)

Risks and Challenges: What WEF 2026 Warned Against

Despite optimism, panels acknowledged the risks.

1. Fragmentation Risk

Multiple blockchains, standards, and platforms could recreate the silos that tokenization seeks to eliminate. (Why Does Interoperability Remain A Problem Across Tokenization Platforms?, 2025)

2. Cyber and Smart Contract Risks

Bugs, hacks, and governance failures remain threats.

3. Illusion of Liquidity

Tokenization does not guarantee buyers. Liquidity depends on market depth, not technology. (Agur et al., 2025)

4. Digital Divide

Without careful design, tokenization may worsen inequality. (Tylinski et al., 2025)

Tokenization Beyond Finance: A Broader Economic Shift

WEF 2026 panels stressed that tokenization is not limited to finance.

Emerging Non-Financial Use Cases

• Tokenized intellectual property royalties
• Digital identities linked to economic rights
• Supply chain traceability tokens
• Data ownership and monetization

This broader vision positions tokenization within the Internet of Value, enabling assets, data, and rights to move as seamlessly as information does today. (Borjigin et al., 2025)

With this broadened view, a central debate at WEF 2026 focused on whether tokenization is revolutionary or evolutionary.

A central debate at WEF 2026 focused on this distinction. One view: Tokenization will replace legacy systems.

• Evolutionary view: Tokenization will quietly integrate, modernizing infrastructure without visible disruption.

After considering both perspectives, the prevailing view favored an evolutionary approach. (Is Tokenization the Future? | World Economic Forum Annual Meeting 2026, 2026)

“Most users will never know they are using tokenized systems—and that’s when we’ll know it worked.”

What This Means for Businesses, Investors, and Policymakers

For Businesses

• Prepare for tokenized fundraising and asset management.
• Rethink balance sheets and ownership structures.

For Investors

• New asset classes and fractional access
• Greater transparency—but new risk dimensions

For Policymakers

• Shift from reactive to anticipatory regulation.
• Coordinate globally to avoid regulatory arbitrage.

Returning to the initial question: Is tokenization the future?

Based on WEF 2026 discussions, tokenization will define the future of financial infrastructure. However, it will depart sharply from today's speculative, unregulated crypto markets. (Is Tokenization the Future? | World Economic Forum Annual Meeting 2026, 2026)

Tokenization’s future is:

• Institutional, not speculative
• Regulated, not anarchic
• Integrated, not isolated

Conclusion: The Quiet Transformation Ahead

The lesson from WEF 2026 is that tokenization is moving from promise to practice. Adoption will involve backend upgrades, pilot projects, regulations, and gradual rollout, not dramatic shifts.

Like the internet transformed commerce without most users knowing how it worked, tokenization may reshape ownership and finance without broad awareness.

Ultimately, as reflected at WEF 2026, tokenization is set to fundamentally restructure global finance. Its impact will extend beyond streamlining processes—it will drive new forms of ownership, market participation, and regulatory frameworks. This transformation will take place quietly yet profoundly, shaping a more inclusive, efficient, and transparent system. For businesses, investors, and policymakers, the message is clear: tokenization demands proactive adaptation for those intent on thriving in the next era.

References

Gagua, F. (June 1, 2025). SWIFT cites high cost of splintered financial world. Asian Banking & Finance. https://asianbankingandfinance.net/exclusive/swift-cites-high-cost-of-splintered-financial-world

(n.d.). The Impact of Distributed Ledger Technology and Tokenization in Fixed Income Issuance. https://www.asifma.org/wp-content/uploads/2025/09/full-report-dlt-report-final3.pdf

(2026). What is 'tokenization'? How does it make investing easier?. World Economic Forum. https://www.weforum.org/videos/what-is-tokenization-how-does-it-make-investing-easier/

Vaziry, A., Wronka, C., Garzon, S. R. & Küpper, A. (2026). Know Your Contract: Extending eIDAS Trust into Public Blockchains. arXiv preprint arXiv:2601.13903. https://doi.org/10.48550/arXiv.2601.13903

(n.d.). Global Economic Prospects, January 2026. https://www.worldbank.org/en/news/press-release/2026/01/13/global-economic-prospects-january-2026-press-release

Rooz, Y. (2025). Tokenization and on-chain capital markets are reshaping global finance. World Economic Forum. https://www.weforum.org/stories/2025/03/tokenization-and-on-chain-capital-markets//

Kunthu, B. R., Taware, R. N. & Anumula, S. K. (2025). Blockchain-Anchored Audit Trail Model for Transparent Inter-Operator Settlement. arXiv preprint 2512.09938. https://doi.org/10.48550/arXiv.2512.09938

(2025). Tokenization and Compliance: Building AML/KYC-Ready Infrastructure. GlobalTokenize. https://globaltokenize.com/2025/11/03/tokenization-and-compliance-building-aml-kyc-ready-infrastructure/

(January 22, 2026). Davos Forum Concludes: Tokenization Emerges as Hottest Topic, Industry Leaders Bullish on 2026 Super Cycle. ([ainvest.com](https://www.ainvest.com/news/davos-forum-concludes-tokenization-emerges-hottest-topic-industry-leaders-bullish-2026-super-cycle-2601-99/?utm_source=openai)). https://www.ainvest.com/news/davos-forum-concludes-tokenization-emerges-hottest-topic-industry-leaders-bullish-2026-super-cycle-2601-99/

Borjigin, A., He, C., Lee, C. C. & Zhou, W. (2025). Element and Everything Tokens: Two-Tier Architecture for Mobilizing Alternative Assets. arXiv:2508.11266. https://doi.org/10.48550/arXiv.2508.11266

(January 21, 2026). Is Tokenization the Future? | World Economic Forum Annual Meeting 2026. World Economic Forum. https://www.youtube.com/watch?v=CBW7Sl9PmDI

Vaziry, A., Wronka, C., Garzon, S. R. & Küpper, A. (2026). Know Your Contract: Extending eIDAS Trust into Public Blockchains. arXiv preprint. https://doi.org/10.48550/arXiv.2601.13903

Vaziry, A., Wronka, C., Garzon, S. R. & Küpper, A. (2026). Know Your Contract: Extending eIDAS Trust into Public Blockchains. arXiv preprint 2601.13903. https://doi.org/10.48550/arXiv.2601.13903

Zhang, J. G. (January 15, 2026). CBDCs and Stablecoins: Balancing Efficiency and Regulation. LinkedIn. https://www.linkedin.com/posts/john-guan-jing-zhang-35a631177_digital-finance-in-2026-what-to-expect-as-activity-7413818119736975360-wD9i

Kunthu, B. R., Taware, R. N. & Anumula, S. K. (2025). Blockchain-Anchored Audit Trail Model for Transparent Inter-Operator Settlement. Eurasian Economic Review. https://doi.org/10.1007/s40822-025-00353-8

(November 30, 2025). Why Does Interoperability Remain A Problem Across Tokenization Platforms?. Outlook India. https://www.outlookindia.com/xhub/blockchain-insights/why-does-interoperability-remain-a-problem-across-tokenization-platforms

Agur, I., Villegas-Bauer, G., Mancini-Griffoli, T. & Peria, M. S. (2025). Tokenization and Financial Market Inefficiencies. Fintech Notes 2025. https://doi.org/10.5089/9798400298905.063

Tylinski, K., Satybaldy, A. & Tasca, P. (2025). Consensus Power Inequality: A Comparative Study of Blockchain Networks. arXiv preprint arXiv:2506.14393. https://doi.org/10.48550/arXiv.2506.14393

Borjigin, A., He, C., Lee, C. C. & Zhou, W. (2025). Element and Everything Tokens: Two-Tier Architecture for Mobilizing Alternative Assets. arXiv preprint 2508.11266. https://doi.org/10.48550/arXiv.2508.11266

(January 21, 2026). Is Tokenization the Future? | World Economic Forum Annual Meeting 2026. World Economic Forum. https://www.youtube.com/watch?v=CBW7Sl9PmDI

(January 21, 2026). Is Tokenization the Future? | World Economic Forum Annual Meeting 2026. World Economic Forum. https://www.youtube.com/watch?v=CBW7Sl9PmDI

Learning from the Indian Stock Market in 2025 - an in-depth analysis

 Learning from the Indian Stock Market in 2025 - an in-depth analysis

2025 has been a year of contrasts for Indian equities. Headlines alternated between structural optimism - a large, growing domestic savings pool, ongoing IPO reforms, and a resilient economy - and near-term headwinds such as heavy foreign selling, cyclical earnings weakness, and shifting global rates. By December 2025 the picture is clearer: India delivered underwhelming returns relative to many peers, policy and regulatory moves changed market plumbing, and the year offered several teachable lessons for investors, corporate managers and policy makers alike. This post breaks down what happened, why it mattered, and the practical lessons to carry into 2026.

Source: Generative AI

The scoreboard: modest index gains, large underlying churn

On an index level the year was muted. Multiple market trackers and analysts describe 2025 as a year in which the Nifty and Sensex produced modest gains while suffering from uneven internals - a narrow set of winners and broad weaknesses elsewhere. Several market commentaries put the Nifty’s year-to-date performance in single digit territory and flagged India as one of the weaker major markets during 2025. 

But index percent changes hide two important realities: (1) persistent foreign institutional investor (FII/FPI) outflows that pressured many large-cap names, and (2) strong domestic flows from mutual funds and retail that supported pockets of the market. The National Stock Exchange (NSE) trading reports show that daily FII/DII nets still moved the market meaningfully on many sessions, underlining how the balance between domestic and foreign flows shaped 2025’s price action. 

Macro backdrop and the central bank

The macro story in 2025 mixed easing inflation pressures with global rate volatility. The Reserve Bank of India (RBI) moved through a gradual easing cycle in the year, cutting the policy repo rate toward the end of the year - one policy timeline shows a repo rate falling to 5.25% by December 5, 2025 - aiming to stimulate credit and growth. Yet bond markets often behaved as if the easing cycle was uncertain, with traders pricing higher yields in response to global treasury moves and worries about sticky inflation/real rates. That dislocation - lower policy rates but higher market yields at times - complicated corporate funding and equity valuations.  

Lesson: monetary policy direction matters, but so does market perception of persistence. For equity investors, falling policy rates can be supportive, but if bond yields are rising due to global spillovers, the equity risk premium may not compress as expected - hurting price appreciation.

Capital flows: the dominant theme

Perhaps the single most important structural theme of 2025 was capital flows. After years of strong foreign appetite for Indian assets, 2025 saw sustained FPI outflows, with some reports estimating tens of billions of dollars of net selling across 2024 - 25. These outflows pushed foreign ownership to multi-year lows in certain segments, amplifying volatility and placing greater reliance on domestic buyers to prop up prices. 

Source: Generative AI

At the same time, domestic institutional investors - mutual funds, insurance funds, pension pools - continued to increase allocations to equities. Analysts forecasted that steady domestic flows could be a stabilizing force heading into 2026, with some brokers projecting sizable ongoing monthly flows from domestic sources. But domestic flows were insufficient in 2025 to fully offset the magnitude and timing of foreign withdrawals, causing sectoral and stock-level dislocations.  

Lesson: market breadth and durability depend on a diverse and sizeable domestic investor base. For policy makers, deepening pension and insurance investments into equities reduces vulnerability; for active managers, monitoring who is behind buying/selling is as important as price action.

Earnings reality: slow and uneven

A big reason 2025’s rally was tepid is earnings - corporate profits slowed and beats were less frequent than in previous expansionary years. Where earnings did surprise, it tended to be in cyclical sectors (banks, auto suppliers, some industrials) while staples, IT services and pharma showed more modest growth or margin pressure. Analysts’ 2026 scenario planning often points to banks, autos and power as expected contributors to EPS recovery, but only if macro momentum improves. 

Lesson: index moves driven by a few mega caps can mask weak overall earnings health. Investors should stress-test portfolios for earnings sensitivity and not rely solely on momentum or thematic narratives.

Regulation and market structure - active year for SEBI

2025 was active on the regulatory front. SEBI issued several reforms - from governance tweaks for market infrastructure institutions to IPO amendments aimed at reshaping listing mechanics and public float timelines. Some proposals also touched disclosure and conflicts of interest for senior officials. These moves reflect a regulator balancing investor protection with capital-market growth. The net effect: a slightly more structured IPO pipeline but also short-term uncertainty for issuers navigating new compliance timelines.  

Lesson: regulatory risk is real and can reshape supply dynamics (IPO cadence, secondary placements). For corporate issuers, clarity and early engagement with the regulator can smooth access to capital. For investors, regulatory signals can be contrarian entry points - but only after understanding the intent and time horizon of reforms.

 Sector winners and losers - a quick map

• Banks and financials: Resilient retail credit growth and improving asset quality helped pockets of private banks. Analysts expected banking to be a leading EPS driver into 2026, conditional on steady credit growth.  
• Auto and cyclical manufacturing: Demand recovery in autos and capex pickup supported autos and related suppliers.
• IT and exports: IT remained mixed - pricing pressure and client budgets constrained growth in places, while some niche software vendors still found pockets of revenue strength.
• Commodities, metals and energy: Volatility in global commodity prices created idiosyncratic winners and losers; commodity firms with better balance sheets outperformed peers.

Lesson: sector allocation mattered more than blind index exposure in 2025. Investors who rotated into cyclicals early and managed earnings risk tended to outperform.

What investors - retail and institutional - learned

1. Follow the flows, not only fundamentals. 2025 showed that even reasonable fundamentals can be overwhelmed by large, persistent outflows. Successful investors watched the direction and type of flows (FPI vs DII) and sized positions accordingly.
2. Diversify sources of return. With single-market risk elevated, investors with multi-asset or global tilts could offset India risk when it underperformed. Within India, diversification across sectors and market-cap bands mitigated concentration shocks.
3. Manage liquidity risk actively. Even liquid large-cap stocks saw episodic liquidity vacuums when selling intensified. Position sizing and stop-loss discipline mattered more than ever.
4. Be valuation-aware, not valuation-afraid. 2025 reset some stretched valuations; patient, disciplined entry based on normalized earnings scenarios proved rewarding in select names.
5. Policy/regulation monitoring is essential. SEBI moves and RBI communications materially affected market mechanics. Proactive regulatory monitoring became a routine part of investment research, not an afterthought.

Practical strategies for 2026 (evidence-based takeaways)

     Source: Generative AI

• Tilt to domestic demand plays if FPI outflows persist. If foreign selling continues, sectors supported by domestic consumption and retail flows (consumer finance, select retail names, housing finance) may be more resilient.  
• Avoid one-way bets on crowded growth names that rely on perpetual multiple expansion; instead focus on earnings quality and balance-sheet strength.
• Consider systematic investment plans (SIPs) and dollar-cost averaging for long-term investors domestic inflows and patient buying smoothing helped many retail investors in volatile 2025 sessions.
• Keep an eye on rates and bond market signals. The unusual episodes where policy easing coincided with rising market yields underscore that bond market signals (yields, OIS) often preview equity pressure points.  

Final thought - a market of both risk and resilience

2025 reinforced a balanced narrative: India’s capital markets remain deepening and structurally attractive over the long term, yet they are not immune to global cycles, liquidity shifts and regulatory recalibration. The year highlighted the increasing importance of domestic savings and institutional flows as the ballast for market stability. It also reminded investors that macro, flows and regulation can be just as price-determining as corporate fundamentals in any given year.

As brokers and strategists look to 2026, many see room for recovery if earnings revive and domestic flows persist - a view that some firms publicly reiterated in December 2025. But recovery is not guaranteed, and the lessons from 2025 are plain: watch flows, respect valuations, manage liquidity, and stay close to policy and regulatory signals. Those who internalize these lessons will be better prepared for whatever the next year brings.

 

Selected sources and reporting used for this analysis (December 2025): Reuters coverage and market news on flows and policy; NSE flow data; SEBI regulatory updates; broker notes on 2026 outlook and sector EPS expectations; and market commentary summarizing 2025 index performance.