It may not sound particularly earth shattering, but tokenisation could revolutionise the funds and asset management industry. “It has the potential to do for financial market infrastructure what the internet did for information – not overnight, but structurally and irreversibly,” says Tom McGrath, chief operating officer of BlackRock Asset Management Ireland and a council member of industry body Irish Funds. “BlackRock frames the current moment as comparable to the internet in 1996: the infrastructure is being built, early use cases are proving out, and the pace of adoption is accelerating.”But just what is this seismic technology and how can it make such a difference? Paul McGrath, asset and wealth management director with PwC Ireland, describes it as the use of digital technology to greatly simplify existing processes.“If an investor buys a unit in an investment fund, that ownership is usually recorded across several separate systems and confirmed through later checks and reconciliations,” he explains. “Tokenisation offers a different way of doing this. It is a method of representing an asset, or a right in an asset, as a digital ‘token’ on a shared digital record – often called a distributed ledger.“In plain terms, instead of ownership being tracked across many separate databases and reconciled afterwards, the token is the digital representation of ‘who owns what’, and that ownership record can be transferred and updated in a controlled way on the ledger,” he adds. “Importantly, tokenisation does not, by itself, change the underlying economic substance of the asset – for example, a fund unit is still a fund unit, and a bond is still a bond – it changes the way ownership and transfers are recorded and operationalised.”Tom McGrath, chief operating officer, BlackRock Asset Management Ireland Using a shared, transparent and tamper-resistant ledger, blockchains create single, synchronised sources of truth for ownership, allowing transactions to be verified and settled directly on‑chain rather than across multiple fragmented systems, says McGrath.“This enables assets to be transferred more efficiently, managed more dynamically and programmed with embedded rules through smart contracts. At its core, blockchain technology establishes trust through cryptography and code, enabling secure, transparent and automated asset movement.”The most immediate operational benefit of tokenisation is settlement efficiency, he says. “Traditional markets rely on multi‑day settlement cycles, which expose counterparties to credit and operational risk. Tokenisation enables near‑instant, and ultimately atomic, settlement – where delivery of the asset and payment occur simultaneously – significantly reducing these risks across a wider set of market participants.”The potential benefits for the global industry are obvious, but this country stands to gain as well. “Ireland is exceptionally well placed to lead on tokenisation in Europe,” says Tom McGrath. As one of the EU’s largest fund domiciles, Ireland has the scale, regulatory sophistication and international distribution reach to make tokenised funds a reality at pace. It is critical that the benefits of tokenisation are embedded within established, well-regulated financial centres such as Ireland.”Paul McGrath, asset and wealth management director, PwC Ireland Paul McGrath agrees: “There is also an opportunity for Ireland to strengthen its role as a hub for financial innovation by providing a stable and well-governed environment for tokenised structures, rather than activity moving to less regulated markets. Irish industry bodies are already focusing on the practical steps needed to make this work safely in real-world fund structures, highlighting that governance, controls and accountability remain central.”More broadly, tokenisation could support Ireland’s competitiveness by making it easier for global firms to service international investors from an Irish base, using modern infrastructure that still meets high regulatory standards, he adds. “Ultimately, tokenisation can become the new way investments are bought and sold, thereby opening up financial markets to a much broader range of investors than has been the case heretofore.”This will require government action. “In order to stay competitive as a global fund hub, Irish legislators need to act quickly to ensure necessary updates are made to Companies Acts 2014 and the ICAV Act to allow for tokenisation innovation and to keep pace with what is happening in competitor fund jurisdictions,” says Paul McGrath.And the time for action is now, according to Tom McGrath. “For Ireland, the imperative is clear: tokenisation is not a future consideration, it is a present competitive reality. Ireland’s response, through the Central Bank of Ireland’s Discussion Paper process, the Department of Finance’s Funds Review 2030 recommendations, and the industry’s own advocacy, will determine whether we lead or follow in the next chapter of global fund management.”