The Financial Markets Authority (FMA) published today its discussion paper on the current and future potential of tokenisation in financial markets. The FMA has asked for submissions by 31 October 2025, with the aim to publish submitter feedback with its initial response. 

Links to the discussion paper and the media release are available here and here. 

Who needs to read it? Why?

All market participants involved or interested in tokenisation of real-world assets or virtual assets in New Zealand should read the discussion paper. The paper shows the FMA’s regulatory trajectory and provides an opportunity for market participants to provide their views and feedback. 

What does it cover?

Tokenisation refers to the process of issuing a separate asset (a token) on a blockchain to represent ownership in real-world assets or virtual assets. Tokens can be stored and traded on a block-chain and range from financial products like bank deposits and managed funds, as well as assets like real estate and cryptocurrency.

The paper provides an overview of the current environment relating to tokenisation and presents discussion topics and questions about areas the FMA has a particular interest in. The paper discusses how New Zealand is currently in the early stages of exploring the technologies supporting tokenised assets. While adoption is currently limited, these emerging technologies have potential to overcome inefficiencies in financial markets and have become a hot topic internationally. 

The FMA is seeking views on three main areas relating to financial markets:

• How is the current regulatory environment helping or hindering domestic tokenisation activity in financial markets?
• What benefits or risks do you see for tokenisation for New Zealand financial markets? 
• What should or could the future market and regulatory environment look like?

Our view

We think the discussion paper is a valuable step toward enhancing market transparency and identifying emerging trends and barriers in the tokenisation space. We look forward to the FMA’s initial response, as clear and consistent guidance and messaging from the FMA on its regulatory approach to tokenisation products and services would provide much-needed certainty and support for the industry to thrive. 

Consistent with the FMA’s observations in the paper, we are seeing a growing trend and interest in tokenisation across the market. This aligns with broader global developments and reflects increasing engagement from both established financial institutions and emerging players in the digital asset space. As a firm at the forefront of blockchain and digital asset developments, this is a topic of strong interest to us, as well as to many of our clients operating in this space. We welcome the opportunity to contribute to the discussion, including through our on-going work directly with the FMA for clients. The industry body, Blockchain NZ, is also involved in co-ordinating the views of New Zealand and international businesses with an interest in tokenisation. 

What next?

If you have any questions in relation to tokenisation in financial markets or would like us to help you prepare your response to the FMA’s discussion paper to submit by 31 October 2025, please contact one of our experts.