Digital ‘tokenisation’ is reshaping the global financial industry. Is NZ ready?
Imagine investing in a prime vineyard in Central Otago, or owning a piece of prime commercial real estate in Wellington, all without needing millions in upfront capital.
Through ‘tokenization’ of assets, this becomes a reality.
Essentially, tokenization converts physical and financial assets into digital data called tokens, which are stored using blockchain technology.
Some tokens represent ownership in the way that digital property titles or stock certificates do. Others can be used for customer loyalty programs, digital event tickets to prevent scalping, or a way to make fast, cheap international payments.
The blockchain itself is essentially a shared digital ledger distributed across computers, with transactions linked to a cryptographic chain. This decentralization and transparency makes tokenization both reliable and efficient.
Why tokenize assets?
For decades, investing in real assets meant navigating lawyers, banks, brokers, registries, mountains of paperwork, high transaction costs and unaffordable minimum expenses.
For example, a $10 million commercial building may require investors to provide much of the entire amount, locking out all but the wealthiest buyers.
Tokenization changes this equation for both buyers and sellers. That same building could be split into 100 digital tokens, each representing 1% ownership worth $100,000.
Just like owning shares in a company, token holders benefit from rental income and property appreciation commensurate with their stake. For sellers, it’s a way to raise capital by attracting many smaller investors instead of a few large ones.
Tokenization is already happening
Digital assets are already woven into the New Zealand economy. BlockchainNZ reports nearly NZ$8 billion in digital assets traded annually, with interest in digital assets becoming increasingly common.
But New Zealand is at an important crossroads. Existing financial regulations were not designed with tokenization in mind, meaning progress is slow and complex.
Industry bodies such as BlockchainNZ, the Banking Association and Payments NZ warn that even small changes to a token’s characteristics can change its legal classification, making compliance confusing and expensive.
Without clear rules, New Zealand risks losing billions to overseas markets that offer more legal certainty.
The global momentum is undeniable
Executives at multinational investment firm BlackRock have compared today’s tokenization to the Internet in 1996, something poised for explosive growth.
Accounting firm Deloitte expects $4 trillion in global real estate to be tokenized by 2035, up from less than $0.3 trillion in 2024.
In November 2025, Australia introduced legislation for digital asset platforms, with Treasurer Jim Chalmers citing potential annual profits of A$24 billion.
Dubai launched its first tokenized real estate platform in May 2025, with a value of $16 billion by 2033. JP Morgan Asset Management has launched MONY, a tokenized cash fund that invests in relatively safe short-term debt securities.
BlockChainNZ held New Zealand’s first real estate tokenization forum in Auckland in July 2025. Industry analysis shows that tokenizing just 2-3% of the domestic real estate market could unlock more than NZ$60 billion in transaction volume.
New Zealand’s position
New Zealand has real advantages: Internet penetration is over 95% of the population; it is a member of the intergovernmental Digital Nations coalition; and it operates an established digital ownership system, ideal for real estate tokenization.
The regulatory conversation is ongoing, with the Financial Markets Authority releasing a discussion paper on tokenization in September 2025.
But the Banking Association has identified a critical gap: while existing laws are technology neutral, they lack clarity for tokenized products.
It recommends revisions to legislation, controlled testing of tokenized financial products, and guidance for industry participants and consumers on regulation and compliance.
Ultimately, New Zealand will need a coherent framework that actively enables safe innovation. As one industry insider has argued:
the rails for tokenization are being laid now and if we don’t help build them, we will be forced to ride on tracks designed by others.
Navigating the risks
Tokenization also brings serious challenges. Local financial laws are written for paper certificates and bank vaults, not digital tokens and blockchain networks.
What rules apply when an Auckland property developer tokenises an apartment complex, or a Marlborough winery offers digital shares? Are these certainties? Property titles? This uncertainty creates a compliance minefield.
Technology risks exacerbate these problems: cybersecurity vulnerabilities, theft or loss of digital keys, bugs or flaws in the blockchain code that hackers can exploit, and failures in technology infrastructure can all cause irreversible losses.
Energy-intensive blockchain systems raise environmental concerns, while weak consumer protections can expose users to fraud and scams.
Tokenized assets can be highly volatile, with rapid price swings encouraging speculation and panic selling. Easy 24-hour trading reinforces the boom and bust cycles. When everyone can trade with a few clicks, panic can spread quickly.
The Financial Markets Authority has warned that market manipulation is becoming easier on multiple unregulated platforms, money laundering is becoming harder to detect in cross-border transactions, and fraud (from fake tokenized assets to digital Ponzi schemes) can scale quickly.
None of this means that tokenization should (or can) be avoided. The challenge for New Zealand is to keep up with this form of financial innovation and retain investment dollars that might otherwise migrate to other jurisdictions.
