Tokenisation (RWA)
Tokenised bonds and funds
The first category where tokenisation works at scale is short-dated debt: government bonds and money market funds. They are easy to value, sit on a deep underlying market and have a clear issuer. We describe below how such a product is built and what to check before buying.
The building blocks
At the base sits an ordinary fund holding short-term government paper, with a manager, a custodian and an auditor. On top comes a token layer: the fund's share register is kept on a blockchain, or an issuing entity mints tokens matching holdings one for one.
Yield comes from the underlying interest and is passed on in two ways. Either value per token grows with the fund (accumulating), or the token price stays stable and new tokens are credited periodically (rebasing). That distinction matters for your records and tax return, since rebases are visible on-chain events.
- Underlying: short-term government paper or deposits
- Accumulating: value per token rises
- Rebasing: token count grows, price stays flat
Settlement and collateral use
Trading firms are interested because a tokenised money market fund can serve as collateral that transfers almost instantly. Instead of waiting a day for settlement, a position can move in seconds, reducing the capital you must keep idle.
For retail investors the effect is indirect: cheaper products and longer trading windows. Still, check the manager's subscription and redemption windows; even a token transferable 24/7 can usually only be redeemed at net asset value on business days.
Where yield and risk sit
Gross yield tracks short-term rates. Management, custody and sometimes a tokenisation fee come off the top; in a low-rate environment that stack can consume much of the return. Always compare net yield against a plain money market fund at your broker.
The main risk is not the government paper but the wrapper: the token issuer, the fund custodian and the smart contract. Find out in the documentation who owns the underlying holdings if the token issuer fails, and whether those assets are legally segregated.
- Compare net yield, not headline rates
- Check whether assets are legally segregated
- Read the issuer insolvency scenario
How it differs from a stablecoin
A euro or dollar stablecoin looks similar but is legally different: under MiCA it is e-money or an asset-referenced token, the holder normally earns no interest and always has a redemption right at par. A tokenised fund is an investment product with price risk, however small, and with yield.
In practice: use a stablecoin to pay and move value, and a tokenised money market fund to earn short-term yield on cash you do not need immediately. Conflating them understates the differences in protection and tax treatment.
Frequently asked questions
Can retail investors access this?
Increasingly yes, but many offerings still target professional investors or set minimum amounts. Check whether the product may be offered to retail clients in your country.
Is this safer than a stablecoin?
It is different. You get a supervised manager and an underlying portfolio, but no right to redeem at par as with a regulated stablecoin.
How is it taxed?
Generally as an ordinary fund holding, though rebasing can create extra bookkeeping. See our Dutch and Belgian tax guides and record every credit.
Read next
What is tokenisation (RWA)?
Tokenisation turns bonds, funds and property into tokens on a blockchain. How it works, what changes legally and where the real risks sit.
Tokenised real estate
Property tokens promise access from small amounts. How the structure works, what it costs and why liquidity usually disappoints.