What Tokenisation Means For Stock Exchanges

Speaking to Moneyweb’s Crypto Pod podcast, Mesh MD Connie Bloem explained how tokenisation is disrupting old stock exchanges and shaping the capital markets of the future.

Barely 20 years ago, the Johannesburg Stock Exchange had more than 400 companies on its roster. Today, with delistings far outpacing any new listings, the JSE is home to fewer than 300. Meanwhile, the London Stock Exchange saw just 18 IPOs in 2024, while the number of listed domestic companies in the United States has halved since the late 1990s, according to World Bank data. Yet, while traditional stock exchanges are declining, tokenised assets are gathering momentum, breathing fresh life into financial markets.

Speaking with Mesh.trade MD Connie Bloem on the Moneyweb Crypto Pod podcast, host Ciaran Ryan said that: “Unless stock exchanges around the world start to tokenise and realise where this market is going to, and the number of options and variabilities that you have with tokenised assets, they’re going to miss out.”

Explosion in tokenised assets

Bloem confirmed that diagnosis, saying that the real-world asset universe has “exploded” in recent months. Pointing to BlackRock CEO Larry Fink’s recent claim that the next generation for markets and securities is tokenised, she said: “That’s absolutely what we’re seeing – not only for Mesh, but the industry as a whole. Within our world specifically – and we very much focus on South African and African-European flows – we’re seeing more and more people coming to the plate wanting to either tokenise their assets or raise capital via tokenisation.”

That momentum is being driven by a growing understanding in the market that there’s more to tokenised assets than just cryptocurrencies.

“A token is a unit of value that’s transacted on a blockchain,” Bloem explained. “It can be anything. It can be a bond. It can be an ounce of gold. It can be a house. It can be a painting. Anything that you can unitise, you can then trade and settle via blockchain technology, and that is called a token.”

How tokenisation is disrupting capital markets

Tokenisation, powered by secure blockchain technology, is disrupting the world’s capital markets and forcing traditional institutions to rethink how they deliver on their purpose. Tokenisation enables capital markets that are secure and open to all.

“On the one side, you have to look at what the technology enables,” said Bloem. “It’s the ability to have more people coming into the market. As an exchange, you should always be stimulating more people to come into the exchange. At its core, an exchange of a country is a custodian of economic growth. You have a responsibility to stimulate it. You have to put in so much work to make sure that you can break down a lot of those barriers.”

Tokenisation’s challenge to stock exchanges

That word – “barrier” – lies at the heart of the issue. “Are exchanges doing enough to bring more people in?” Bloem asked. “Are they doing enough to make it easier, lighter, more transparent, more efficient to deal on the stock exchange or on the exchange in general, where there’s a stock and a bond exchange or commodity exchange? Are they doing enough?”

Technology, she said, is only one part of the puzzle. “If you really want to stimulate growth, you will be putting things in place – processes, procedures, lighter boards, lighter regulations – to stimulate it,” she said. “Because yes, a lot of the exchanges are hammering on being protective of the market, protecting this ability of the market. But you can’t protect the stability of a market if you don’t have a market that is expanding. Because then you’re just protecting a dying animal.”

Bloem ended with a challenge to all exchanges: “What are you doing to break down those barriers?” she asked. “Technology is but one part. But help us grow the economy. The space is more than open, more than big enough, for us all to work in here together. We are challenging the norm. I challenge them to do so as well.”

Listen to the full interview here: