Tokenization of Traditional Assets in Emerging Markets: Strategic Partnerships as Catalysts for Financial Inclusion and Market Efficiency

The tokenization of traditional assets—real estate, commodities, equities, and more—is rapidly reshaping financial markets, particularly in emerging economies. By leveraging blockchain technology, these innovations are enabling fractional ownership, real-time settlements, and reduced transaction costs, addressing long-standing inefficiencies in traditional systems. Central to this transformation are strategic partnerships between financial institutions, regulators, and technology providers, which are accelerating adoption and fostering financial inclusion.

Strategic Partnerships: Bridging Legacy Systems and Digital Innovation

Recent collaborations have demonstrated the power of cross-sector alliances in unlocking tokenization's potential. For instance, S&P Dow Jones Indices (S&P DJI) partnered with Centrifuge in July 2025 to tokenize the S&P 500 Index, marking the first time the index has been licensed for digital tokensExploring Tokenization: A New Era for Traditional Assets, [https://www.indexologyblog.com/2025/08/11/exploring-tokenization-a-new-era-for-traditional-assets/]^[1]. This move underscores the growing relevance of tokenization in bridging traditional and digital finance. Similarly, Citigroup's proof-of-concept (PoC) for tokenized asset issuance using distributed ledger technology (DLT) highlights how legacy institutions are testing frameworks for real-time compliance checks and fractional ownershipBringing Traditional Assets to Digital Networks: Exploring Tokenization in Private Markets, [https://www.citigroup.com/global/insights/bringing-traditional-assets-digital-networks-exploring-tokenization-private-markets]^[2].

In emerging markets, partnerships are particularly transformative. India's Small Industries Development Bank of India (SIDBI) has completed pilots for a tokenized collateral network (TCN) in collaboration with Infosys, leveraging blockchain to reduce risks of duplicate collateral pledging and automate regulatory complianceIndia state-owned SIDBI completes pilots for asset tokenization, [https://coingeek.com/india-state-owned-sidbi-completes-pilots-for-asset-tokenization/]^[3]. Meanwhile, Nigeria's National Information Technology Development Agency (NITDA) has emphasized tokenization as a tool to democratize access to real estate and commodities, supported by the 2024 Investment and Securities Act (ISA) that provides a regulatory framework for digital assetsTOKENIZED ASSETS ARE HERE — WHAT NIGERIA'S NEW LAW, [https://www.linkedin.com/pulse/tokenized-assets-here-what-nigerias-new-law-means-future-craig-olori-zctkf]^[4].

Financial Inclusion: Democratizing Access to Capital

Tokenization's most profound impact lies in its ability to lower barriers to entry for underserved populations. Fractional ownership allows individuals in emerging markets to invest in high-value assets like real estate or gold with minimal capital. For example, tokenized gold products in jurisdictions with high inflation have enabled retail investors to hedge against currency devaluation while bypassing traditional banking infrastructureTokenization as a Driver for Growth and Financial Inclusion: Lessons from Emerging Markets, [https://gftn.co/insights/tokenization-as-a-driver-for-growth-and-financial-inclusion-lessons-from-emerging-markets]^[5].

India's Terazo and Tokeny partnership exemplifies this trend. Their regulated tokenized real estate project, Oryx, allows both qualified and secondary investors to participate in a $50 million greenfield development via the Polygon blockchain, significantly reducing entry barriersTerazo and Tokeny Join Forces for India's First Regulated Tokenization Project, [https://tokeny.com/terazo-and-tokeny-join-forces-for-indias-first-regulated-tokenization-project/]^[6]. Similarly, Nigeria's tokenization initiatives, supported by NITDA and BAZE University, aim to let everyday investors access infrastructure projects through digital tokens, fostering a more inclusive economyTOKENIZED ASSETS ARE HERE — WHAT NIGERIA'S NEW LAW, [https://www.linkedin.com/pulse/tokenized-assets-here-what-nigerias-new-law-means-future-craig-olori-zctkf]^[4].

Market Efficiency: Reducing Friction in Trade and Settlement

Tokenization streamlines financial processes by replacing manual, intermediated workflows with automated smart contracts. This is particularly impactful in emerging markets, where legacy systems often lead to slow settlements and high operational costs. For instance, tokenized U.S. Treasuries have demonstrated the potential to reduce liquidity management costs in the $28 trillion market, with market value doubling in five months in 2024The Great Tokenization Shift: 2025 and the Road Ahead, [https://keyrock.com/the-great-tokenization-shift-2025-and-the-road-ahead/]^[7].

In Indonesia, a coalition of Tiger Research, BRI Ventures, and D3 Labs is projected to unlock an $88 billion asset tokenization market by 2030, leveraging the country's natural resources and digital infrastructure to tokenize commodities like nickel and palm oil[Special Report] Indonesia's $88 Billion Asset Tokenization Market ..., [https://reports.tiger-research.com/p/special-report-indonesias-88-billion-eng]^[8]. Such initiatives not only enhance liquidity but also provide transparent, auditable records of ownership, critical for building trust in underdeveloped markets.

Challenges and the Path Forward

Despite progress, challenges persist. Regulatory fragmentation remains a hurdle, with jurisdictions like India and Nigeria still refining frameworks to balance innovation and investor protectionIndia state-owned SIDBI completes pilots for asset tokenization, [https://coingeek.com/india-state-owned-sidbi-completes-pilots-for-asset-tokenization/]^[3]TOKENIZED ASSETS ARE HERE — WHAT NIGERIA'S NEW LAW, [https://www.linkedin.com/pulse/tokenized-assets-here-what-nigerias-new-law-means-future-craig-olori-zctkf]^[4]. Cybersecurity risks and interoperability issues between blockchain networks and legacy systems also require attentionTokenization and Financial Market Inefficiencies - IMF, [https://www.imf.org/en/Publications/fintech-notes/Issues/2025/01/29/Tokenization-and-Financial-Market-Inefficiencies-561256]^[9]. However, the World Economic Forum and institutions like the IMF emphasize that harmonized regulatory approaches and public-private collaboration can mitigate these risks while scaling adoptionAsset Tokenization in Financial Markets | World Economic Forum, [https://www.weforum.org/publications/asset-tokenization-in-financial-markets-the-next-generation-of-value-exchange/]^[10].

Conclusion

The tokenization of traditional assets, driven by strategic partnerships, is poised to redefine financial inclusion and market efficiency in emerging markets. By democratizing access to capital and streamlining processes, these innovations address systemic inefficiencies while creating new opportunities for growth. As regulatory frameworks mature and infrastructure scales, the next few years will likely see tokenization transition from niche experiments to mainstream adoption—a shift that investors and policymakers must prepare for.