Patricia Callan
Director, Financial Services Ireland Group
Financial services are undergoing rapid technological change as tokenisation is redefining how we invest.
The first Industrial Revolution brought the world the steam engine alongside machines to produce textiles. This development meant much less need for specialists in hand weaving, which is to say, worker anxiety over new technology is not a new phenomenon.
In 2026, deep into the fourth Industrial Revolution, AI is the dominant theme shaping the global economy and capital markets. In addition to AI, the blockchain is another central pillar of this latest era for innovation. Financial services are increasingly defined by speed, with customers expecting seamless transactions almost instantaneously.
With that in mind, tokenisation — the process of creating a digital representation of an asset using a blockchain-based token — is a technological advancement with far-reaching ramifications.
Fractionalisation
That is particularly the case in the investment world, where tokenisation can remove the settlement delays that typically come with trading stocks and bonds. This technology also opens new avenues for product development through fractionalisation, which is when ownership of an asset (stocks, bonds, even real estate or fine art) is divided into smaller digital units. This process means investments previously out of reach for retail investors due to high costs or illiquidity are now accessible — part of the wider democratisation of investing.
Of course, a hedge fund’s risk/return profile is different to an individual with limited investment knowledge. In its recent paper, ‘DLT & Tokenisation in Financial Services’, the Central Bank of Ireland emphasised the need for a “robust regulatory framework that ensures financial stability and consumer protection”.
tokenisation — the process of creating a digital representation of an asset using a blockchain-based token — is a technological advancement with far-reaching ramifications
Irish leadership
Overall, the regulator views tokenisation as a great opportunity to improve efficiency and lower costs. With that in mind, Ireland’s position as a leading international fund domicile — the third-largest fund centre in the world — means it can be a driving force for tokenisation.
Technology and rapid change can be scary at times, but as history has proven time and time again, the benefits of innovation typically outweigh any short-term disruption. Tokenisation is another example of ingenuity at work and will be at the centre of this latest revolution in financial services.
