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The Evolution of Financial Market Infrastructure: From Digitalization to Tokenization

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This paper examines the historical development and cross sectional heterogeneities of Financial Market Infrastructure (FMI). From an evolutionary perspective, we review and compare FMIs in the US, Europe, and China. We identify an emerging trend in which the development of FMI is transitioning from digitalization to tokenization with the rise of Distributed Ledger Technology (DLT). Digitalization reinforces centralization, while tokenization promotes decentralization, posing complex challenges to regulatory framework which is also part of FMI. We then specifically analyze DLT based FMI in the bond market, evaluate different models of tokenization, and propose a heterogeneous consortium blockchain solution.

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  • Guo, Dong & Zhou, Peng, 2023. "The Evolution of Financial Market Infrastructure: From Digitalization to Tokenization," Cardiff Economics Working Papers E2023/5, Cardiff University, Cardiff Business School, Economics Section.
    • Handle: RePEc:cdf:wpaper:2023/5
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    1. Chen, R. & Chen, K. & Ou, Carol, 2023. "Facilitating interorganizational trust in strategic alliances by leveraging blockchain-based systems: Case studies of two eastern banks," Other publications TiSEM 85ecf99c-76f0-416e-9604-d, Tilburg University, School of Economics and Management.
    2. Berndsen, Ron J. & León, Carlos & Renneboog, Luc, 2018. "Financial stability in networks of financial institutions and market infrastructures," Journal of Financial Stability, Elsevier, vol. 35(C), pages 120-135.
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    Cited by:

    1. Zhang, Ying & Gong, Bing & Zhou, Peng, 2024. "Centralized use of decentralized technology: Tokenization of currencies and assets," Structural Change and Economic Dynamics, Elsevier, vol. 71(C), pages 15-25.
    2. Yue Ma & Abdullah Al Mamun & Mohammad Masukujjaman & Roslan Ja’afar, 2025. "Modeling the significance of unified theory of acceptance and use of technology in predicting the intention and usage of eCNY," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 11(1), pages 1-32, December.
    3. Zhang, Ying & Tavalaei, M. Mahdi & Parry, Glenn & Zhou, Peng, 2024. "Evolution or involution? A systematic literature review of organisations' blockchain adoption factors," Technological Forecasting and Social Change, Elsevier, vol. 208(C).
    4. Zhou, Peng & Zhang, Ying, 2025. "Major Conundrums and Possible Solutions in DeFi Insurance," Cardiff Economics Working Papers E2025/5, Cardiff University, Cardiff Business School, Economics Section.

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