Jefferies says tokenisation within European market infrastructure is advancing beyond pilot projects and entering an early stage of strategic deployment. The investment bank frames the core question for exchange investors as no longer whether tokenisation will take place, but which frictions it addresses and how revenue and profits will be redistributed across the market structure value chain.
The firm notes that much of the current debate has focused on technology, but stresses that the more consequential issue is structural: whether the industry is simply replacing existing systems, replicating their behaviour on new rails, or re-engineering market structure. Jefferies warns that migrating today's arrangements onto distributed ledger technology risks perpetuating legacy inefficiencies rather than removing them.
Wholesale use case: intraday collateral mobility
Jefferies identifies intraday collateral mobility as the most persuasive wholesale application of tokenisation. In the firm's view, the ability to move eligible collateral intraday has the potential to raise capital efficiency by roughly 3% to 5% for institutions operating at large flow scales. As an operational example, Jefferies points to Deutsche Börse's system - including HQLAX together with Eurex and Clearstream - as an early implementation that mobilises collateral without transferring the underlying asset.
The report also highlights London Stock Exchange Group's LCH and its swap agent business as well placed to benefit, provided that pre-trade issuance processes can be integrated with post-trade eligibility checks. That integration would be necessary to realise the efficiency gains Jefferies describes.
Cash remains the binding constraint
Despite the promise around securities movement, Jefferies underscores cash tokenisation as the central bottleneck. True delivery-versus-payment requires securities and cash to reside on aligned rails in real time. Jefferies notes that fiat currency settlement commonly operates at T+1 or slower, stablecoins are private money with unresolved accounting treatment for globally systemically important banks, and central bank digital currency coverage is still limited. Further, distributed ledger rails typically require pre-funding and cannot natively represent credit on-chain, which constrains how cash legs can be handled.
Equity tokenisation and retail distribution
For equities, Jefferies describes tokenisation primarily as a retail distribution phenomenon. The firm cites platforms such as Robinhood issuing tokenised wrappers around shares to give crypto-native users exposure to equity cashflows. Jefferies stresses that these tokens are issued by the platforms themselves rather than by the underlying corporate issuers, meaning the instruments resemble derivatives tied to cashflows and typically lack governance rights attached to ordinary shares.
Strategic implications for market infrastructure
Jefferies frames tokenisation as both a potential threat and an opportunity for listed financial market infrastructures. While some revenue pools remain protected by regulation that requires registry-like functions, vertically integrated groups that combine liquidity, connectivity, collateral management and asset servicing could be best positioned to capture market share if tokenisation advances. Nevertheless, the firm cautions that a three- to five-year horizon is short for financial market infrastructure, where adoption, regulatory change and ecosystem coordination traditionally progress slowly. Consequently, Jefferies anticipates limited near-term disruption to central securities depository or exchange market shares.
Overall, Jefferies urges market participants to focus on the specific frictions tokenisation can solve and on designing changes that improve structural inefficiencies rather than simply transplanting legacy processes onto new technology stacks.