[Vantage Point] Do you want to own one square meter of Ayala Avenue?
There is a simple way to understand tokenized securities, and it has nothing to do with Bitcoin.
Let’s say that you want to own a physical piece of a premium office tower on Ayala Avenue, valued at P20 billion. Because a property like that is usually held by a big corporation or a real estate investment trust (REIT), your access to it will be restricted to purchasing listed shares or participating in institutional funds.
But what if that same building could be digitally divided into millions of tiny ownership units, each representing a legally recognized fraction of the property?
Instead of needing millions of pesos, an ordinary Filipino could invest a few thousand pesos and own a genuine economic interest in that asset.
That is the basic idea behind tokenized securities, one of the innovations now being explored by the Securities and Exchange Commission (SEC) under Chairperson Francis Lim through its Strategic Sandbox.
In an exclusive interview, the SEC chairperson sought to demystify one of finance’s newest buzzwords.
Despite its unfamiliar terminology, he explained, tokenization is not about creating another cryptocurrency. It is the use of blockchain technology to represent ownership of real-world financial assets in digital form under the supervision of securities regulators.
Mainstream finance
This matters because cryptocurrencies such as Bitcoin derive their value largely from market demand and scarcity. A tokenized security, on the other hand, derives its value from an underlying asset that already exists.
It could represent shares of stock, corporate bonds, government securities, real estate, infrastructure projects or even investment funds. The token is simply a new way of recording, transferring, and settling ownership.
Think of it as replacing a paper land title with a secure digital title. The property does not change. It is only the method of proving ownership that becomes faster, cheaper, and more efficient.
This idea is no longer theoretical. Singapore has become one of the world’s leaders through the Monetary Authority of Singapore’s Project Guardian, which brings together institutions such as DBS (Development Bank of Singapore), UBS (formerly known as Union Bank of Switzerland), JPMorgan, Citi, and Standard Chartered to test the tokenization of bonds, money market funds, foreign exchange transactions, and private credit.
Rather than treating blockchain as a speculative technology, Singapore is integrating it into mainstream finance under clear regulatory rules. Switzerland has taken a similarly pragmatic approach. It established a legal framework that recognizes certain digital securities, allowing regulated financial institutions to issue and trade tokenized assets.
Instead of replacing traditional financial markets, tokenization complements them by reducing paperwork, accelerating settlement times, and expanding market availability for investors.
Even the United States, despite its cautious regulatory stance toward cryptocurrencies, has seen growing interest from major asset managers exploring tokenized money market funds, Treasury securities, and private investment products.
Optimizing systems
The direction is becoming increasingly clear. Global financial giants are not betting on cryptocurrencies replacing traditional finance. Instead, they are focused on using blockchain technology to optimize existing financial systems.
The Philippines has every reason to pay attention.
Our capital market has long suffered from a limited supply of investment products. Many Filipinos build wealth through bank deposits, real estate, or a relatively small number of listed stocks. Private companies often remain inaccessible to ordinary investors because minimum investment requirements are too high, while many infrastructure projects rely heavily on institutional capital.
Tokenization has the potential to narrow those gaps.
Imagine a solar power project costing P5 billion. Traditionally, financing would come from banks, institutional investors, or a public offering accessible mainly through conventional channels.
Under a tokenized structure, that same project could theoretically be divided into millions of digital ownership units. A teacher investing P10,000, an overseas Filipino worker investing P25,000, and a retiree investing P50,000 could all participate in the same project through regulated digital securities.
The same principle could eventually apply to warehouses, toll roads, commercial buildings, ports, and even private equity investments that have historically been reserved for wealthy investors.
The real advantage is not that assets become cheaper. A P10-billion office building remains worth P10 billion. What changes is that ownership becomes divisible. Instead of buying an entire asset, investors buy precisely the portion they can afford.
That seemingly simple change could dramatically broaden financial inclusion.
There are operational benefits as well. Traditional securities transactions often involve multiple intermediaries, manual reconciliation, and settlement periods measured in days. Blockchain-based tokenization allows ownership records to be updated almost instantly, while maintaining an auditable record of every transaction. Administrative costs fall, settlement risk declines and markets become more efficient.
Still, tokenization should not be romanticized.
A tokenized security does not change its fundamental legal or financial nature. If the underlying company performs poorly, the token declines in value.
If a commercial building loses tenants, investors suffer regardless of how ownership is recorded. Technology cannot eliminate credit risks or poor management. It simply modernizes the infrastructure through which investments are issued, traded, and settled.
That is precisely why the SEC’s cautious approach deserves attention. Rather than rushing to approve every blockchain innovation, the commission has placed tokenized securities inside a regulatory sandbox where new products can be tested under supervision before wider adoption.
The objective is not to chase technological fashion, but to understand how innovation can strengthen investor protection while expanding capital formation.
Whether tokenization ultimately transforms Philippine finance remains uncertain. Many legal, tax, and operational issues still need to be resolved. Trading systems must evolve, custodial arrangements must be clarified, and investors must be educated. This is because technology advances far more quickly than the regulations governing it.
Yet history suggests that financial markets continually evolve toward greater accessibility. Stock certificates gave way to electronic records. Trading floors gave way to online platforms. Paper checks gave way to digital payments. Each transition initially appeared unfamiliar until it became ordinary.
Tokenized securities may represent the next chapter in that evolution. If implemented prudently, they could allow ordinary Filipinos to invest in assets that have traditionally been beyond their reach, not by making those assets smaller, but by making ownership more accessible. That may ultimately prove to be the most important innovation of all.
I welcome your views on these and other issues where decisions made in power shape the country’s economic future.
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