Why Banks Need to Rethink Their Products for the Tokenized World

The financial world is undergoing an unprecedented transformation: the tokenization of assets and services. Representing assets, from fiat currencies to real estate and debt securities, as digital tokens brings new opportunities for liquidity, transparency, and automation. For traditional banks, this revolution is not just another trend: it’s a strategic imperative. In this article, we explore the reasons why financial institutions must revisit, redesign, and reinvent their products to thrive in the tokenized era.

Tokenization: The New Liquidity Standard

In traditional infrastructure, settlement operations can take days or even weeks, especially when involving multiple markets or jurisdictions. With blockchain-based tokens, transactions settle within seconds, reducing counterparty risk and capital costs.

Tokenizing assets into smaller fractions expands the investor base, creating more liquid markets with narrower spreads. Products like tokenized real estate investment funds open the door for retail investors, democratizing access to assets previously limited to large players.

Personalized Customer Experience

Today’s customers expect intuitive platforms that let them track their investments in real time. Tokenized products integrate seamlessly into mobile apps, enabling portfolio visualization, report generation, and order execution directly on the blockchain.

Smart contracts allow for personalized conditions such as progressive lock-up periods, automatic deleveraging triggers, or token buybacks upon reaching target returns. This flexibility enhances the value proposition of banks, offering a higher level of customization to clients.

Operational Efficiency and Cost Reduction

Reconciling records, issuing statements, managing and executing collateral enforcement are tasks that traditionally demand manual effort and legacy systems. With tokenization, many of these routines can be executed automatically at the protocol level, freeing teams to focus on more strategic initiatives.

By integrating the tokenization layer directly into existing banking processes—such as adding modules for token issuance, settlement, and reconciliation into the core banking system, data silos, maintenance costs, and interface complexity are reduced, ensuring a unified environment under full institutional control.

Compliance by Design and Traceability

Permission rules embedded directly into smart contracts ensure automatic validation, at each token transfer, of compliance with KYC/AML requirements, with no need for manual steps or exposure of sensitive data. This guarantees that only authorized users can operate, while giving institutions the flexibility to operate on public, private, or hybrid networks.

The transparency inherent in blockchain networks ensures complete audit trails. Every token transfer leaves a permanent trace, facilitating fraud detection and cooperation with regulatory authorities.

Integration with Real World Assets (RWA) and Alignment with CBDCs

Tokenizing real-world assets (credit notes, commodities, leasing contracts) paves the way for more dynamic credit markets. Banks can position themselves as facilitators of issuance or liquidity providers in tokenized RWA pools, capturing new revenue streams.

As CBDC initiatives gain global traction, banks should aim to offer services and products compatible with future digital currencies issued by monetary authorities. This includes tokenized digital accounts, conversion gateways, and specialized custody solutions.

Beyond Intermediation

A bank’s expertise in securing digital assets can be offered to third parties, from fintechs to corporations looking to issue internal tokens. This represents an adjacent business model that reinforces the bank’s role as a trusted custodian.

Banks can evolve from being mere credit and payment providers to becoming marketplaces for tokenized assets, connecting issuers, investors, and service providers in an integrated ecosystem. This positions the bank as a digital hub, participating in every stage of the value chain.

The tokenized world is not a distant promise, it’s an accelerating reality. For banks, rethinking products means more than just digitizing existing offerings; it means reprioritizing business models, adopting protocols that enable instant settlement, built-in compliance, and tailored customer experiences. Those institutions that embrace the token economy as a strategic opportunity will lead the next financial era.

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About Wireshape

Wireshape is a consultancy firm in digital assets, empowering financial institutions and fintechs to achieve regulatory compliance by guiding them in designing business models and modular blockchain architectures.

We also develop smart contracts, on-chain protocols and oracles, build dApps, and integrate blockchain systems with legacy infrastructure. Wireshape is the creator of Levery, a next-generation digital asset exchange infrastructure that bridges TradFi and DeFi. Levery enables banks and fintechs to launch and operate their own fully regulation-compliant DeFi platforms, with KYC/AML monitoring, dynamic fee adjustments, and price syncing via oracles.

Incubated by Uniswap, accelerated by Santander X, and supported by the Brazilian Federal Government through RNP, Levery is redefining the institutional decentralized finance landscape.

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