Murat Ungor, Senior Lecturer in Economics, University of Otago, Olena Onishchenko, Senior Lecturer in Finance, University of Otago
Imagine investing in a premium Central Otago vineyard, or owning a slice of prime Wellington commercial property, all without needing millions in upfront capital.
Through asset “tokenisation”, this is becoming a reality.
Essentially, tokenisation converts physical and financial assets into digital records, called tokens, which are stored using blockchain technology.
Some tokens represent ownership in the way digital property titles or share certificates do. Others might be used for customer loyalty schemes, digital event tickets to prevent scalping, or a means to make fast, low-cost international payments.
The blockchain itself is basically a shared digital ledger distributed across computers, with transactions linked into a cryptographic chain. This decentralisation and transparency makes tokenisation both trustworthy and efficient.
Why tokenise assets?
For decades, investing in real-world assets has meant navigating lawyers, banks, brokers, registries, mountains of paperwork, hefty transaction costs and prohibitive minimum spends.
A $10 million commercial building, for example, might require investors to commit large proportions of the full amount, locking out all but the wealthiest buyers.
Tokenisation 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.
Like owning shares in a company, token holders benefit from rental income and property appreciation proportional to their stake. For sellers, it’s a way to raise capital by attracting many smaller investors rather than a few large ones.
Tokenisation is already happening
Digital assets are already woven into New Zealand’s economy. BlockchainNZ reports nearly NZ$8 billion of digital assets traded annually, with interest in digital assets becoming more common.
But New Zealand stands at an important juncture. Existing financial regulations weren’t designed with tokenisation in mind, meaning progress is slow and complex.
Industry bodies such as BlockchainNZ, the Banking Association and Payments NZ warn that even slight changes in a token’s features can alter its legal classification, making compliance confusing and expensive.
Without clear rules, New Zealand risks losing billions to overseas markets offering greater regulatory certainty.
Global momentum is undeniable
Executives from multinational investment company BlackRock have compared tokenisation today to the internet in 1996, something poised for explosive growth.
Accounting firm Deloitte projects US$4 trillion in global real estate will be tokenised by 2035, up from less than US$0.3 trillion in 2024.
In November 2025, Australia introduced legislation for digital asset platforms, with Treasurer Jim Chalmers citing potential annual gains of A$24 billion.
Dubai launched its first tokenised real estate platform in May 2025, projecting US$16 billion in value by 2033. J.P. Morgan Asset Management has launched MONY, a tokenised cash fund that invests in relatively safe short-term debt securities.
BlockChainNZ held New Zealand’s first real estate tokenisation forum in Auckland in July 2025. Industry analysis suggests tokenising just 2–3% of the domestic property market could unlock over NZ$60 billion in transaction volume.
New Zealand’s position
New Zealand has genuine advantages: internet penetration exceeds 95% of the population; it is a member of the intergovernmental Digital Nations coalition; and it operates an established digital land-title system, ideal for real estate tokenisation.
The regulatory conversation is underway, with the Financial Markets Authority releasing a discussion paper on tokenisation in September 2025.
But the Banking Association has identified a critical gap: while existing laws are technology-neutral, they lack clarity for tokenised products.
It recommends legislative reviews, controlled testing of tokenised financial products, and guidance for industry participants and consumers on regulation and compliance.
Ultimately, New Zealand will need a cohesive framework that actively enables safe innovation. As one industry insider has argued:
the rails for tokenisation are being laid now and if we don’t help build them, we’ll be forced to run on tracks designed by others.
Navigating the risks
Tokenisation also brings serious challenges. Local financial laws were written for paper certificates and bank vaults, not digital tokens and blockchain networks.
When an Auckland property developer tokenises an apartment building, or a Marlborough winery offers digital shares, which rules apply? Are these securities? Property titles? This uncertainty creates a compliance minefield.
Technology risks compound these problems: cybersecurity vulnerabilities, digital key theft or loss, bugs or flaws in blockchain code that hackers can exploit, and malfunctions in the 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.
Tokenised assets can be highly volatile, with rapid price swings encouraging speculation and panic selling. Easy round-the-clock trading amplifies boom-and-bust cycles. When everyone can trade with a few clicks, panic can spread rapidly.
The Financial Markets Authority has warned that market manipulation becomes easier across multiple unregulated platforms, money laundering may be harder to detect in cross-border transactions, and fraud (from fake tokenised assets to digital Ponzi schemes) can scale quickly.
None of this means tokenisation should (or can) be avoided. The challenge for New Zealand is to keep up with this form of financial innovation, and to retain investment dollars that might otherwise migrate to other jurisdictions.
The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.
