Tokenisation Is Coming to Financial Sector Boardrooms. Are Directors Asking the Right Questions?
Tokenisation Is Coming to Financial Sector Boardrooms. Are Directors Asking the Right Questions?
By Ethel D. Cofie
At the Africa Virtual Asset Summit 2026, convened by Ghana’s Securities and Exchange Commission (SEC), I joined a panel discussing tokenisation, investor protection and the capabilities financial institutions need as digital assets become part of mainstream finance.
I approach this conversation from the perspective of someone who has worked on both sides of technology adoption. I supported deployment of mobile money at Vodafone , and today I serve on financial-sector boards and chair technology committees. I have seen how a promising technology becomes a product that institutions must deliver, manage and remain accountable for. That experience shapes the question I bring to discussions about tokenisation: What will the board be asked to approve? If your institution decides to use tokenisation to issue, sell or manage financial assets, do you understand what you are approving, what could go wrong, and who will be accountable if it does?
1. What is tokenisation, and why should a financial institution care?
Imagine a commercial building worth US$10 million. Now, instead of recording those investment units only in a conventional register, imagine that each unit is represented by a digital token. A token is a digital record that represents a defined right or interest. These tokens can be recorded and transferred using blockchain technology, a shared digital system that maintains a record of transactions.
First, the building has not been physically divided into 10,000 pieces. What has been divided is the investment interest in the building. Second, allowing multiple people to invest in one property is not new. Financial institutions have been structuring shared investments for decades. Tokenisation changes how those interests can be recorded, transferred and potentially managed. It does not invent fractional investment. What problem are we solving that tokenisation solves better than the conventional alternatives?
Management might argue that tokenisation will reduce costs, accelerate transactions, improve recordkeeping or attract a wider pool of investors. Each claim deserves examination.
Take costs. A digital token may reduce some of the administrative work involved in recording and transferring investments. But the institution may also incur new costs: developing or purchasing the technology, integrating it with existing systems, securing digital assets, managing specialist service providers, obtaining legal advice and maintaining regulatory compliance.
Consider speed. Tokens may be transferred quickly between digital accounts. But a faster transfer of a token does not necessarily mean faster settlement of the entire transaction. Payments, identity checks, legal requirements and the transfer of enforceable rights must also be completed.
Then there is access. Dividing an investment into smaller units could make it affordable to more investors. But smaller investment sizes do not automatically create a larger market. Investors still need access to an authorised platform, confidence in the underlying asset and a way to sell their investment when they need their money.
Finally, transparency. Blockchain technology can create a shared, traceable record of token transactions. But that record is only as useful as the information and controls connecting the tokens to the real-world asset.
Consider a cashew exporter with a confirmed US$150,000 export order. The buyer will pay in 90 days, but the exporter needs money now to purchase, process and ship the cashews.
The difficulty is that each additional investor brings administrative work: checking their eligibility, documenting their investment, recording their share, distributing repayments and providing reports. Those costs can make a relatively small transaction uneconomical. Tokenisation could potentially reduce some of that work. The financing interests could be represented by digital tokens, with a shared record of who holds each interest and systems designed to distribute repayments when the exporter receives payment.
But tokenisation does not guarantee that the exporter will be paid. It does not eliminate credit risk, legal requirements or the need to assess investors and comply with regulation.
This is where tokenisation becomes commercially interesting: not simply doing an existing transaction faster, but potentially making a worthwhile transaction possible at a cost that works for everyone involved.
The board’s first test is straightforward: What measurable improvement or new commercial opportunity will tokenisation deliver over the best conventional alternative, after accounting for the full costs, dependencies and risks?
2. What exactly does the investor own?
Return to our US$10 million building. An investor has purchased five digital tokens for US$5,000. What have they actually bought?
Do they own a share of the building itself? Shares in a company that owns the building? A right to receive a portion of the rental income? Or a contractual promise that someone will pay them an amount linked to the building’s performance?
The blockchain may accurately record that an investor holds five tokens. But that record alone does not establish what the investor is legally entitled to receive, who must deliver it or what happens if that obligation is not met.
Consider what happens if the company managing the investment becomes insolvent. Can investors establish a claim to the underlying property, or are they simply creditors of the failed company? If the property is sold, who is entitled to the proceeds? If rental income is not distributed, against whom can investors enforce their rights?
And there is an important distinction between having legal documents and having independently verified, enforceable investor rights.
A legal agreement may describe what investors are entitled to. But the board needs assurance that those rights are valid under the applicable law, consistent with the actual ownership arrangements and capable of being enforced if the issuer or another party fails.
The board’s test is simple: Can we explain, in plain language, what the customer owns, what they can claim and against whom? If the institution cannot answer that question clearly, the product is not ready for approval.
3. Where does the risk sit, and who carries it?
One company may issue the tokens, another may operate the platform, a third may hold the underlying asset, and yet another may safeguard the digital credentials used to control the tokens.
Start with custody. Who holds the underlying asset, and who controls access to the tokens? These are two different responsibilities. A custodian may hold the legal title documents for a property, while a technology provider controls the digital infrastructure through which tokens are accessed and transferred.
Then consider reconciliation. If the institution has issued 10,000 tokens representing investment units in our US$10 million building, there must be reliable evidence that those tokens continue to correspond to the investment interests they are supposed to represent.
Reconciliation should not be confused with valuation. Confirming that 10,000 tokens correspond to 10,000 valid investment units does not establish that the building is still worth US$10 million. The value of the underlying asset requires a separate, credible valuation process.
Security is another critical consideration. Digital assets introduce risks involving compromised credentials, unauthorised transactions, cyberattacks and failures in the systems used to safeguard them.
Suppose the platform goes offline, a critical technology provider collapses or access to digital assets is lost. Can the institution establish who owns what? Can customers still exercise their legal rights? Can the service be restored, and has that recovery process actually been tested?
A recovery plan that exists only on paper is not sufficient evidence of resilience.
Consider a hypothetical proposal. Management has presented a convincing business case, clear legal arrangements and a credible technology provider. But recovery testing reveals that customers could lose access to their tokens for several days following a major systems failure.
For a product where investors expect to hold their investment for several years, a temporary interruption might be manageable if ownership records remain secure, customer rights are protected and reliable alternative arrangements exist. For a product promising immediate access or frequent trading, the same interruption could undermine a fundamental customer promise.
The board might require remediation before launch, authorise a tightly controlled pilot with appropriate safeguards, or reject the proposal until recovery capabilities improve.
These risks may be distributed across several providers, but outsourcing a function does not remove the institution’s responsibility to its customers.
The board’s test is this: If the technology, a custodian or a critical service provider fails tomorrow, can we demonstrate that customers’ assets and rights remain protected, that we know who is responsible, and that we can recover?
4. Are we capable of governing what we’re introducing?
Understanding the risks of tokenisation is one thing. Having the institutional capability to manage them is another.
The question is not whether every director understands the technical details of blockchain. It is whether the board has access to enough knowledge and independent expertise to challenge management’s proposals and recognise when important risks have not been addressed.
Start with competence. What expertise exists within the board and management? Where are the gaps? Can the institution draw on independent specialists who understand digital asset custody, cybersecurity, legal enforceability and operational resilience?
There is also a difference between having access to a technical expert and having an institution capable of operating the product safely.
A blockchain specialist may understand how tokens are created and transferred. But that expertise does not automatically mean the finance team can reconcile them, the legal team can enforce the associated rights, the operations team can recover from failure or the risk function can independently challenge the arrangements.
Accountability must be explicit.
The CEO remains accountable for the institution’s delivery of the product, with a named executive responsible for coordinating its implementation and operation across teams and vendors. But naming an executive is not enough. That person must have the authority to coordinate departments, challenge service providers, escalate unresolved problems and initiate the agreed response when critical controls fail.
Once a tokenised product is operating, the board needs more than customer acquisition, transaction volumes and revenue. It should receive meaningful information on the reconciliation of tokens to underlying interests, custodian and vendor performance, security incidents, near misses, customer complaints and the results of recovery testing.
The board’s test is this: Do we have the competence, independent assurance and accountability arrangements to challenge this proposition before launch and oversee it effectively afterwards?
5. What would make us approve, pause or reject the proposal?
A board’s decision on tokenisation should not come down to whether directors are enthusiastic about the technology.
Before approval, the board should expect evidence of a credible business case, clearly defined and enforceable customer rights, appropriate regulatory permissions, reliable custody arrangements, tested security controls and a demonstrated ability to recover from failure.
A controlled pilot may allow an institution to validate customer demand, test operating processes and gather evidence about performance before making a larger commitment. Such a pilot should have a defined purpose, limited exposure, appropriate regulatory permissions, safeguards for participants, clear success criteria and a plan for ending or expanding the exercise.
However, a pilot is not an excuse to experiment with unresolved customer ownership rights, unreliable asset records or inadequate safeguards.
It should also establish the conditions under which an operating product must be paused or suspended. Those conditions should be agreed before launch, not negotiated in the middle of a crisis.
Consider reconciliation. If the number of tokens in circulation cannot be reconciled to the valid investment interests they represent, the institution must investigate immediately. An unexplained discrepancy that cannot be promptly resolved should trigger suspension of affected activities.
Consider security and resilience. A serious unresolved security incident, a failed recovery test or the failure of a critical custodian or technology provider should trigger a predefined response. Depending on the severity and the protections available, that response may include restricting transactions, suspending the service or initiating recovery arrangements.
For pension trustees, fund managers and other institutional investors, there is an additional question: Should we invest in the underlying asset at all?
A tokenised property investment must still satisfy the fund’s investment mandate, applicable regulatory requirements and standards for valuation, custody and risk. Trustees should examine whether there is a credible way to exit the investment. A token may be technically transferable without there being enough willing buyers to sell it when needed.
As I argued during the summit, tokenisation doesn’t change the asset. It changes the plumbing. Tokenisation does not turn a poor investment into a good one. Nor does it eliminate the fundamental responsibilities of those managing other people’s money.
The real test of board readiness
Tokenisation will create opportunities for some financial institutions. Others may find that their existing systems, products and distribution models remain more effective.
The quality of the board’s decision will depend on the evidence it demands, the assumptions it challenges and its willingness to distinguish commercial opportunity from technological enthusiasm.
For me, the decision comes down to three questions. First, do we understand what we are approving and what the customer is legally entitled to receive? Second, can management demonstrate that the institution has the people, processes, technology, controls and tested recovery arrangements to deliver that promise? Third, have we established who is accountable, what we will monitor and the conditions under which we will intervene?
A board that can answer these questions is better positioned to decide whether to proceed, pilot, delay or reject a proposal.
The responsibility is not to approve innovation at every opportunity. It is to make informed decisions that protect customers, support sound commercial outcomes and remain defensible when circumstances change.
What is never sound is a yes the board cannot explain. Approval is not the end; it’s the start of oversight.
Apply the questions in your own boardroom
For directors, board chairs and executive teams assessing an actual proposal, the companion paid Tokenisation: The Boardroom Decision Workbook translates these questions into commercial assessments, evidence requirements, risk and readiness checks, and a structured approach to deciding whether to approve, pilot, defer or reject a proposal. Purchase the workbook: https://selar.com/9prys47449