Asset servicing

Why tokenise? i

After a bond or fund is sold, someone has to pay its interest or dividends, keep track of who owns it, process events such as votes and splits, and repay it at the end. Today that work passes along a chain of agents and custodians that each keep their own records. Putting the asset and its rules on one shared ledger lets payments go straight to holders from a single record. A few tokenised funds and bonds already do this for simple, scheduled payments; the rest is still theory.

Improves an existing process Asset servicing already works, but it is labour-intensive and costly. A tokenised asset can carry its own terms, such as the coupon rate and payment dates, and the ledger is the record of who holds it. Payments can then be worked out and made from that one record instead of being re-checked at every step. The clearest live examples are tokenised money market funds paying dividends as new tokens, and a few digital bonds paying coupons on the ledger. Complex corporate actions, such as those where investors must choose, and tax withholding have not yet been automated in live deployments we have found.

The problem today

• Interest payments and other corporate actions on bonds are still mostly handled by hand.^[1]
• Processing corporate actions costs the industry a great deal. Estimates cited in a 2025 industry pilot put it in the tens of billions of dollars a year.About $58 billion a year (DTCC estimate) and about $34 million per event on average (Citi estimate)^[2]
• Every firm in the custody chain keeps its own record. Custodians check announcements against several data sources, and records have to be reconciled across the chain of intermediaries, which delays payments.^[1]
• Bond repayment at maturity is processed by hand through intermediaries, and tax relief for foreign investors often relies on paper forms and later reclaims.^[1]
• Reconciliation is a large part of post-trade cost. An industry framework cites an older estimate that simplifying post-trade processing could save a third or more of its cost.Post-trade processing cost $6–9 billion a year as of 2015; simplifying it could save $2–4 billion, much of it reconciliation^[1]

Today vs tokenised (simplified)

End to end: several days around each payment, plus reconciliation afterwards → seconds on the payment date · for scheduled payments such as coupons and fund dividends; corporate actions that need investors' choices still take time

Benefits · 6, of which 2 evidenced

Who it suits

Asset manager, Specialist digital asset custodian, Market infrastructure (FMI), Bank, Government, Non-financial company · effort: high · one firm can get value on its own

• Issuers and fund managers with a tokenised asset, or a transfer agent or registrar able to keep the official record on a ledger
• A legal basis for the ledger to be the record of ownership, such as Germany's Electronic Securities Act or Swiss DLT law
• Custodians and paying agents connected to the platform

Limits and open questions

• There is little cash on ledgers, so many payments still have to go through ordinary banking, which limits how far servicing can be automated.^[1]
• Keeping only the records on a ledger, while the asset stays in existing systems, brings smaller gains, and linking ledgers to existing databases can create new reconciliations.^[1]
• Moving a register between ledgers is not yet simple. When KfW switched the registrar and blockchain of a live bond in September 2026, the old tokens could not be moved across: new tokens were created on the new ledger and the old ones deleted. KfW says common standards and interoperable systems are needed.^[8]
• Live examples cover simple payments. Corporate actions that need investors' decisions, and cross-border tax, are not yet automated on any deployment we have found, and an industry pilot on corporate action data reports no measured results.^[2]
• Many investors still hold digital bonds through links into traditional depositories such as Euroclear and Clearstream, as with the World Bank's bond on SDX, so part of the existing servicing chain remains.^[6]
• Custodians remain responsible for overseeing corporate actions, now including the smart contracts that run them, so the custody chain gets simpler rather than disappearing.^[1]