Time to tokenise – Jennifer Bridge

Executive summary

Tokenisation—the digital representation of real‑world assets on distributed ledgers—is emerging as a major structural shift in global finance. Jersey’s Time to Win strategy positions the Island to lead in this space, supported by strong regulatory credibility, a top‑tier MONEYVAL rating, and deep expertise in fund administration and securitisation.

The Jersey Financial Services Commission (JFSC) has already issued guidance requiring Jersey incorporation, AML/CFT compliance, independent verification of asset backing, and a Jersey‑resident director. This principles‑based framework gives flexibility while maintaining high governance standards. Jersey’s involvement in international regulatory initiatives, including co‑leading the GFIN Tokenisation Project, further strengthens its position.

Tokenisation presents meaningful economic opportunities. Global tokenised markets could reach US$16 trillion by 2030, and even a small share would be significant for Jersey’s £6.9bn economy. Tokenised structures align well with Jersey’s existing strengths and could support new high‑value employment and fund administration activity.

However, risks are material. International bodies highlight vulnerabilities including redemption runs, leverage chains, contagion through shared platforms, smart‑contract failures and operational risks. Legal uncertainty persists across jurisdictions, and Virtual Asset Service Providers (VASPs) in Jersey are not yet subject to full prudential regulation. Rapid expansion before December 2026 when Jersey has to report on the recommendations in the MONEYVAL evaluation could expose the Island if AML implementation is not demonstrably robust.

The paper argues for cautious, quality‑controlled growth: prioritising institutional, fully collateralised structures; strengthening AML supervision; benchmarking against evolving global standards; and collecting better data to distinguish genuinely new activity from displaced traditional business.

Done well, tokenisation can reinforce Jersey’s competitiveness. Done poorly, it risks reputational damage that would be difficult to reverse.

Policy Context and Introduction

This paper is published in response to the Government of Jersey’s Time to Win strategy, launched on 19 March 2026 as the outcome of the Financial Services Competitiveness Programme. The strategy formally commits the Government to “embracing digitalisation and taking a lead on tokenisation” as one of five strategic priorities for Jersey’s financial services sector. The strategy was informed by over 200 stakeholder interviews and an Independent Expert Panel chaired by Sir Howard Davies. The Budget 2026-2029 provides a funding envelope of almost £31 million for the Time to Win programme as a whole, which is around £8 million a year.^[1]

Tokenisation constitutes a major structural shift concerning how assets are structured, traded and settled. Jersey has presented itself as a jurisdiction capable of supporting this emerging market, and the JFSC has issued formal guidance to underpin that ambition.^[2]

What is Tokenisation?

Tokenisation creates a digital representation of an asset or of rights in that asset. In Jersey, the main use case for tokenisation is tokenised equity and tokenised funds. Elsewhere, tokenisation can include commodities such as carbon credits, and this may develop in Jersey in the future.

A digital token is recorded on a distributed ledger (a shared digital record-keeping system that stores and tracks ownership of tokens across multiple participants simultaneously, with no single central authority controlling it) on a blockchain (a type of distributed ledger that stores data in a sequence of linked, cryptographically secure blocks). Each token indicates ownership or a fractional claim on the underlying asset, evidenced by a digital token stored in a secure wallet rather than a paper deed or share certificate. Tokenisation can reduce or reconfigure some intermediated processes in certain structures with smart contracts: self-executing code embedded in a blockchain. Tokens can be bought, sold, or transferred peer-to-peer across borders with near-instant settlement.^[3]

The technology provides several advantages, but tokenisation’s main attraction is that it can make parts of the financial system more efficient. By recording ownership and transfers on a blockchain, tokenisation can create a transparent and auditable asset ownership history. It can also reduce frictions across asset servicing and has the potential to reduce the number of intermediary layers and settlement times.

Another important feature is programmability. Tokenised assets can be encoded with rules via ‘smart contracts’, meaning actions such as payments can be executed automatically when predefined conditions are met, resulting in more efficient processing and fewer manual handoffs. This also makes it possible to embed certain rules directly into the asset itself, such as transfer restrictions and eligibility criteria, providing more efficient processing and fewer manual hand-offs.

Tokenisation may also make it easier to facilitate fractional ownership of high-value assets, lowering minimum investment sizes and widening access to assets that have traditionally been difficult for smaller investors to enter (such as real estate or private equity). Fractional ownership is not unique to tokenisation, and fractional shares already exist in traditional markets, but tokenisation can make those structures easier to manage, particularly in private markets where ownership changes are often slower, more manual and more expensive to process.

This is also why tokenisation is frequently linked to the prospect of better secondary trading. A secondary market is where investors buy and sell existing asset holdings. In theory, tokenised structures could make transfers in assets such as real estate or private equity more straightforward and more efficient. But this has not yet been achieved consistently in practice, due to factors such as limited liquidity and fragmented infrastructure. Tokenisation may improve the mechanics of transfer, but it does not create willing buyers and sellers on its own.

Virtually any quantifiable asset can be tokenised: bonds, equities, treasury bills, commercial property, commodities, carbon credits and intellectual property. But the value of any tokenised asset ultimately depends on the rights attached to it. Those rights must be clearly defined and recognised under the relevant legal and regulatory framework.

Jersey’s Tokenisation Strategy

Regulatory Framework

In August 2024, the Jersey Financial Services Commission (JFSC) published guidance on asset tokenisation, focusing on the economic substance (what an asset is and what it does) rather than its legal form. For example, if something functions like a security, the JFSC will treat it as a security even if it has been structured or labelled differently.^[2]

Key requirements include:

• incorporation in Jersey
• compliance with requirements on anti-money laundering (AML), countering the financing of terrorism (CFT) and countering proliferation financing (CPF)
• published independent verification that tokens are backed by a real asset of equivalent value and legally separated from the issuing company’s other assets and liabilities
• the appointment of a Jersey-resident director^[4].

The JFSC publishes a public register of Virtual Asset Service Providers (VASPs). According to the 2024 Jersey Mutual Evaluation Report, VASPs in Jersey are currently regulated under anti-money laundering (AML) rules, but they do not fall under full prudential regulation, which is designed to ensure financial institutions dealing with tokenised assets have enough resources to remain solvent and stable. This distinction is further discussed in the risks section.

Jersey’s 2024 MONEYVAL Fifth Round Mutual Evaluation is considered a strategic asset, as the report confirms that Jersey’s effectiveness in preventing financial crime ranks among the highest worldwide. Jersey is rated as compliant or largely compliant with 39 of 40 Financial Action Task Force (FATF) recommendations, is ranked among the top 10 jurisdictions globally for AML/CFT compliance and received commendation for its beneficial ownership transparency and international cooperation. The report found that no fundamental improvements were required to Jersey’s AML/CFT/CPF regime.^[5]

For institutional investors, this provides confidence that tokens issued from Jersey are secured by rigorous know-your-client (KYC) and AML controls, a credibility few jurisdictions can match.

Market Status

Jersey’s regulatory approach positions the Island as a jurisdiction in which tokenisation, digital asset funds, and VASP activity operate under a transparent governance framework. The JFSC co-led the Global Financial Innovation Network (GFIN) Tokenisation Project alongside the Central Bank of Bahrain, with the Financial Conduct Authority (FCA) as a key participant, reinforcing Jersey’s engagement with international regulatory standard-setting.^[8]

Opportunities for Jersey

Economic and Fiscal Benefits

Financial services account for approximately 40% of Jersey’s economy and generate around 70% of tax revenue.^[9] With economic growth forecast at 0.9% in 2026, materially below the long-term average, tokenisation could be a new growth driver.^[10]

Tokenisation structures require fund administrators, custodians, trustees, legal advisers and compliance specialists — services Jersey already provides. Tokenised funds under administration could potentially add to the £465.9 billion already administered in Jersey as of Q2 2025.^[11] Many finance industries are moving towards tokenisation, and Jersey needs to be able to service tokenised products to retain its position as a competitive international finance centre.

Given that most finance-derived tax revenue flows from personal income tax rather than corporate tax, growth in high-skilled employment carries direct fiscal benefits.^[9]

The tokenised assets market is forecast to reach US$16 trillion by 2030.^[6] Even a modest share of structuring and administration activity would be meaningful for an economy with a GDP of £6.9 billion.^[9]

Leveraging Existing Strengths

Jersey is adapting proven capabilities to a new platform rather than starting from scratch. Its established securitisation frameworks, fund administration expertise, rule of law, political stability, tax neutrality and existing institutional relationships provide a solid foundation.^[2]

The Time to Win strategy recognises that younger generations have different asset preferences, including digital and tokenised assets, and that the global wealth transition of the next two decades represents a structural opportunity. The adoption of tokenisation does not require a whole new skill set. The depth of professional experience already present in Jersey needs only to be applied to the new technological rails of tokenisation.^[1]

Risks and Challenges

Regulatory and Legal Uncertainty

Virtual asset service providers (VASPs) are regulated under AML rules but not subject to full prudential regulation, which could create reputational exposure if a Jersey-licensed VASP were to fail.^[4]

In many jurisdictions, it is not yet settled in law whether blockchain-recorded ownership carries the same legal weight as a traditional title registry. On 2 December 2025, the UK Property (Digital Assets etc) Act 2025 confirmed that digital assets, including cryptocurrency and non-fungible tokens, are recognised as personal property in England, Wales and Northern Ireland. The Scottish Parliament is considering equivalent legislation. This means that cryptocurrency or non-fungible tokens can now be recognised as personal property. Where disputes cross national borders, Jersey-based structures may be exposed to litigation in foreign jurisdictions.^[4]

The International Organisation of Securities Commissions (IOSCO) has warned that retail investors (non-professional) may be exposed to complex tokenised products they do not fully understand, particularly where fractional ownership creates an illusion of liquidity.^[12]

Financial Stability Vulnerabilities

The Financial Stability Board (FSB), an international body that monitors and makes recommendations about the global financial system, assessed that tokenisation “does not currently pose a material risk to financial stability, mostly due to its small scale,” but warns that it “could have implications for financial stability if the tokenised part of the financial system scales up significantly.”^[3] The concern is not tokenisation as it exists today, but what would happen if it grew substantially.

The FSB identifies five specific vulnerabilities.

• First, on redemption risk, it notes that a tokenised asset may offer its holders an opportunity to redeem its value at any time; however, if the assets backing this claim have a different maturity or liquidity profile than the token, this might increase redemption run risk. A token can be sold at the click of a button at any hour, but the real asset it represents, such as a share of a commercial building, cannot be turned into cash overnight. If many token holders try to exit at once, there may be no quick way to pay them out. The FSB calls this a “run risk”, which is the same phenomenon that causes bank runs, now potentially built into tokenised property or funds.
• Second, on leverage, the FSB warns that rehypothecation of tokenised assets could lead to the build-up of leverage in the financial system. This describes the practice of using a borrowed asset as collateral to borrow again, and then again. If the value of the original token falls, the whole chain can collapse at once.
• Third, on contagion, the FSB identifies how a large integrated tokenisation platform could create new interdependencies between institutions that are not directly connected to each other. If many different financial institutions share the same platform, a hack, technical failure or loss of confidence ripples across all of them simultaneously, even where they have no direct relationship. In the same way the 2008 financial crisis spread through complex securitisation chains that nobody had fully mapped in advance.
• Fourth, the FSB warns that increased complexity and opacity of tokenisation projects lead to unpredictable outcomes in times of stress. When products are built from layers of automated smart contracts and multiple platforms, it becomes very difficult to predict how they will behave when something goes wrong. Automated systems may react faster than humans can intervene, spreading problems in ways that nobody anticipated.
• Fifth, on operational risk, the FSB cautions that smart contracts are an integral part of tokenisation, but their security practices are still evolving, giving rise to vulnerabilities that can potentially be exploited by malicious actors. Unlike established banking IT systems refined over decades, smart contract code is relatively new. Errors that are hard to fix once deployed may be spotted and exploited by criminals before anyone else is aware. Additionally, if these tokenised products run on public distributed ledgers, misplaced transfers and scams can be irreversible.

AML Implementation Pressure

Jersey is expected to report back to MONEYVAL under its regular follow-up reporting process in December 2026.^[7] The pseudonymous, cross-border nature of tokenised assets poses AML challenges that Jersey’s prevailing frameworks, designed largely around fund administration and private wealth, may not yet fully address.^[13] Aggressively expanding tokenisation activity before December 2026 risks drawing scrutiny if AML implementation is found wanting. Undermining Jersey’s MONEYVAL standing would damage the very credentials that make the Island attractive for institutional tokenisation.^[5]

Displacement of Existing Business

The JFSC has acknowledged that tokenisation can reduce costs and increase the transferability of assets.^[2] According to Jersey Finance, the rapid expansion of asset tokenisation is expected to significantly impact the cross-border fund industry, but there are still challenges to address before its full effects, whether growing or reshaping markets in areas like securitisation, fund administration, and custody, can be determined.

Policy Considerations

Prioritise Quality Over Volume

Jersey’s competitive advantage rests on high standards and institutional confidence, not volume.^[5]

Several questions warrant consideration.

• At what point, and on what evidential basis, should Jersey extend its tokenisation framework to retail-facing products, i.e. available to the public? What investor protection standards would need to be in place before that threshold is reached?
• Should the 100% collateralisation and independent verification requirements currently applied to tokenised structures be maintained as a baseline condition for all Jersey-domiciled tokenisation activity, or should a tiered approach be considered for different asset classes or investor categories?
• How should Jersey balance the commercial imperative to remain competitive with the reputational imperative to maintain the high governance standards on which its institutional relationships depend?

Strengthen AML Implementation Before December 2026

Jersey’s 2024 MONEYVAL assessment placed it in the top 10 jurisdictions globally for AML/CFT compliance.^[5] Several questions arise in this context.

• Are current supervisory resources sufficient to oversee VASP activity at its present scale, and what assessment has been made of the additional resourcing that would be required if tokenisation activity grows materially before the review?
• Does the current National Risk Assessment adequately capture the AML/CFT risks associated with digital assets and tokenised structures, and if not, what process is in place to update it?
• Are supervisory approaches to VASP compliance sufficiently active, including through testing and thematic review, to provide assurance that AML/CFT obligations are being met in practice rather than on paper?
• What consideration has been given to the pace of tokenisation growth in the context of Jersey’s December 2026 MONEYVAL follow-up report, and is there a mechanism for the JFSC and Government to monitor that relationship on an ongoing basis?

Benchmark Against Global Standards

Jersey does not operate in isolation. The major economies that dominate global financial markets are all actively developing detailed regulatory frameworks for digital assets and tokenisation, and those frameworks are moving quickly. The EU has already introduced Markets in Crypto Assets (MiCA), a comprehensive rulebook applying across all 27 member states. The UK is developing its own equivalent. Singapore, one of Jersey’s most direct competitors, is advancing rules through its central bank, the Monetary Authority of Singapore. As these frameworks bed in, the international standard for what “proper regulation” of tokenisation looks like will become increasingly specific and consistent. Jersey’s current approach, setting broad principles rather than detailed rules, has been designed to allow flexibility in the early stages of a new market.

Three international bodies set the standards that shape how jurisdictions are judged: the International Organisation of Securities Commissions (IOSCO), which oversees securities markets globally; the Financial Stability Board (FSB), which advises the G20 on financial stability risks; and the Financial Action Task Force (FATF), which sets global anti-money laundering standards.

This raises several practical questions worth considering in determining Jersey’s approach.

• Jersey’s current regulatory model sets broad principles rather than prescribing detailed rules, a deliberate design choice that has provided flexibility in the early stages of a new and evolving market. However, as the EU, UK, and Singapore introduce increasingly specific requirements, a question arises about whether that flexibility will continue to read as a strength in the eyes of institutional investors and major banks, the primary audience for Jersey’s tokenisation offer, or whether the absence of a detailed rulebook will increasingly be perceived as a gap rather than an advantage.
• There is also a question of timing. Moving too early to adopt more prescriptive rules risks locking Jersey into a framework that does not align with where international standards eventually settle. Waiting too long risks falling behind competitors who have already codified their approaches. At what point, and on what evidential basis, should Jersey begin to transition from a principles-based to a more rules-based framework for tokenisation, and what process should govern that decision?
• Finally, Jersey already holds a place at the table in the international bodies where these standards are being written. The question is whether that participation is sufficiently focused on tokenisation specifically, and whether the JFSC has the specialist staff and resources needed to engage substantively at the pace these discussions are now moving, rather than simply monitoring and adopting the outputs of others after the fact.

Monitor Additive vs Substitutive Effects

Whether tokenisation will add new activity to Jersey’s financial services sector or displace existing business has not yet been established by publicly available data. This empirical gap has direct implications for economic and fiscal policy, and several questions arise from it. What data should the Government and the JFSC be collecting to distinguish between genuinely new tokenisation activity and activity that has migrated from traditional structures? Is there currently a mechanism for doing so? If not, what reporting requirements would need to be introduced? Where are the platforms operating Jersey-domiciled tokenised assets based, and is that information currently captured in a form that allows its fiscal and employment implications to be assessed? Should regular reporting on collateralisation levels, liquidity profiles and redemption risk from tokenised structures be introduced as a condition of operating in Jersey, and if so, by whom should that reporting be required and to whom should it be made?

Conclusion

Tokenisation represents a genuine structural shift within financial markets,^[3] and the Time to Win strategy’s pledge to lead in tokenisation is strategically coherent. Jersey’s MONEYVAL evaluation,^[5] securitisation expertise, legal infrastructure, and institutional relationships provide a differentiated platform compared to less-regulated jurisdictions.^[2]

The most credible path is cautious, quality-controlled growth: institutional and collateralised structures over retail-facing products; AML/CFT implementation strengthened before December 2026; and Jersey’s frameworks kept continuously benchmarked against shifting global standards. Done poorly, it risks damage to reputation that would take years to repair. Done well, tokenisation can meaningfully support Jersey’s financial services sector.

Biographical note

Jennifer Bridge MBE is an accomplished Chair with extensive experience across the creative arts, third sector, and political spheres.

Jennifer contributes regularly to public discourse through her columns and articles in local media, focusing on inclusion and open government.

During the COVID-19 pandemic, she completed postgraduate studies in research methodologies, which has enhanced her evidence-based approach to public commentary.

Jennifer is a co-organiser of Jersey repair café – a community group where volunteers fix broken items like clothes, electronics, and bikes for free, promoting sustainability and reducing waste.

Jennifer is a Policy Centre board member and one of its lead researchers.

References

[1]  Government of Jersey, Time to Win: Financial Services Competitiveness Programme — Ministerial Report and Action Plan, March 2026. Available at: https://www.gov.je/SiteCollectionDocuments/Government%20and%20administration/Time%20to%20Win%20report.pdf

[2]  Jersey Financial Services Commission (JFSC), Tokenisation of Real-World Assets (RWAs): Guidance Note, 28 August 2024. Available at: https://www.jerseyfsc.org/industry/guidance-and-policy/tokenisation-of-real-world-assets-rwas/

[3]  Financial Stability Board (FSB), The Financial Stability Implications of Tokenisation, 22 October 2024. Available at: https://www.fsb.org/uploads/P221024-2.pdf

[4]  Jersey Financial Services Commission (JFSC), Tokenisation of Real-World Assets (RWAs): Guidance Note, 28 August 2024 [as reference 2]; and Property (Digital Assets etc) Act 2025 (c.29), Royal Assent 2 December 2025. Available at: https://www.legislation.gov.uk/ukpga/2025/29/enacted

[5]  Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), Fifth Round Mutual Evaluation Report: Jersey, MONEYVAL(2024)7, Council of Europe, adopted 23 May 2024, published 24 July 2024. Available at: https://www.fatf-gafi.org/content/dam/fatf-gafi/fsrb-mer/Jersey-MER-2024.pdf.coredownload.inline.pdf

[6]  Boston Consulting Group (BCG) and ADDX, Relevance of On-Chain Asset Tokenization in ‘Crypto Winter’, September 2022. Available at: https://addx.co/files/bcg_ADDX_report_Asset_tokenization_trillion_opportunity_by_2030_de2aaa41a4.pdf

[7]  MONEYVAL, Press Release: MONEYVAL acknowledges Jersey’s progress in improving measures to combat money laundering and financing of terrorism, Council of Europe, 24 July 2024. Available at: https://www.coe.int/en/web/moneyval/-/moneyval-acknowledges-jersey-s-progress-in-improving-measures-to-combat-money-laundering-and-financing-of-terrorism

[8]  Global Financial Innovation Network (GFIN), Global Regulatory Perspectives on Tokenisation, GFIN Tokenisation Project Report (co-led by the Jersey Financial Services Commission and the Central Bank of Bahrain, with the Financial Conduct Authority as a key participant), November 2025. Available at: https://thegfin.com/uploads/publications/pdf/1765428132_GFIN%20Tokenisation%20Report%20November%202025%20(1).pdf

[9]  Statistics Jersey, Jersey’s Economy 2024: GDP and GVA, 3 October 2025. Available at: https://stats.je/wp-content/uploads/2025/10/R-Jerseys-Economy-2024-SJ20251003.pdf [Note: Statistics Jersey reports financial and insurance activities as 38.5% of GVA in 2024; GDP was £6,859 million; the 70% tax revenue figure is consistent with the Time to Win report (reference 1) and Fiscal Policy Panel analysis.]

[10]  Jersey Fiscal Policy Panel, Economic Assumptions, May 2025, Government of Jersey. Available at: https://www.gov.je/Government/Departments/Economy/Pages/FiscalPolicyPanel.aspx

[11]  Jersey Financial Services Commission (JFSC), Quarterly Funds Statistics: Q2 2025, published August 2025. Available at: https://www.jerseyfsc.org/industry/sectors/funds/funds-statistics/

[12]  International Organisation of Securities Commissions (IOSCO), Tokenization of Financial Assets, Final Report FR/17/25, November 2025. Available at: https://www.iosco.org/library/pubdocs/pdf/IOSCOPD809.pdf. See also Financial Stability Board (FSB) (reference 3) for associated financial stability vulnerabilities.

[13]  Financial Action Task Force (FATF), Updated Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers, October 2021. Available at: https://www.fatf-gafi.org/en/publications/Fatfrecommendations/Guidance-rba-virtual-assets-2021.html. See also MONEYVAL (2024) (reference 5).