“In the tokenised economy we can make money smart”
Investing in luxury hotels and a Picasso painting or just paying a taxi ride? Deutsche Bank expert Sabih Behzad explains how a tokenised economy will revolutionize investments and payment flows. And where the risks are lurking.
Nestling in the foothills of the Colorado mountains is the luxury resort St Regis Aspen. There is something even more special about it than its exquisite marble bathrooms and hot tubs, though: nearly one fifth of the hotel was sold through digital tokens in 2018. “By purchasing digital tokens, investors can own a tiny fraction of a property”, says Sabih Behzad, Head of Digital Assets and Currencies at Deutsche Bank. “This is a really powerful concept as tokenisation democratises access to high-value assets.”
This is a really powerful concept as tokenisation democratises access to high-value assets.
Democratising investments – much more than just luxury hotels
Tokenisation involves storing assets and money as a digital token on a blockchain. A blockchain is a decentralised, forgery-proof database; the tokens are – quite simply – a digital deed of ownership. Tokens can represent a broad range of assets: physical assets like real estate or art; or financial assets like equities or bonds; and even music.
In 2021, Pablo Picasso’s 1964 masterpiece Fillette au béret was tokenised. A media release by the Swiss Sygnum Bank explained that it had issued 4,000 tokens. Priced at 4 million Swiss francs, investors looking to own a “share” of the masterpiece were asked to make a minimum investment of 5,000 Swiss francs.
In the case of the Picasso above, the asset is a digital representation on a blockchain. Other traditional assets can also be stored on the blockchain in the form of tokens. These are different to what experts refer to as “native” tokens. The World Bank describes blockchain native tokens as ones “that do not exist outside of the blockchain”. A famous example of a native token is bitcoin. “Another example of a native token is a tokenised bond such as the one we supported KfW last year”, adds Sabih. “There is no physical representation of that bond at a Central Securities Depository. The bond only exists in digital form.”
The investment opportunities of the tokenised economy are not without risk. “Whether they are tokenised or not, it is important that investors understand the assets they want to invest in”, says Sabih. “We will need appropriate regulation so that investors gain trust in this new market and banks need to bring in their expertise to advice their clients on tokenised assets.”
Market capitalisation estimates vary widely; either way, it’s immense
Talking of the market for tokenised assets, experts agree that it is immense – although their estimates do vary quite substantially. According to estimates from the Boston Consulting Group, tokenisation of global illiquid assets could be a 16 trillion dollar business opportunity by 2030. McKinsey on the other hand expects total tokenised market capitalisation to reach around 2 trillion dollars by 2030 (excluding cryptocurrencies like bitcoin and stablecoins like Tether).
(…) we believe we are approaching an inflection point, where the promised potential of blockchain will be realized (…)
Citigroup anticipates tokenisation to grow by a factor of 80 in private markets and reach up to almost 4 trillion dollar in value by 2030. Citi analysts believe that “we are approaching an inflection point, where the promised potential of blockchain will be realised and be measured in billions of users and trillions of dollars in value. Successful adoption will be when blockchain has billion-plus users who do not even realise they are using the technology.”
Not just tokenised, but smart
The concept of a tokenised economy goes beyond just tokenising money and assets. “Once money and assets are tokenised, another key feature of this particular economy comes into play: programmability”, says Sabih. “That means that payments can occur automatically, when certain conditions are fulfilled. For example, when a car enters a low emission zone, it could trigger an automatic payment.”
Using the example of a taxi ride, Sabih explains that this kind of programming can be used for much more complex flows of money. “Imagine paying a 50 dollar taxi fare and the banks could programme that payment to trigger an automatic decision about where to direct the money”, Sabih says. “Part of the money would go instantly to the taxi company and could be transferred to different accounts for taxes, insurances and maintenance, for example. A further agreement could be made to make an instant payment straight to the taxi driver and – if they so choose – to a separate savings account where they are putting money aside for a longer holiday. The example demonstrates that in the tokenised economy we can make money smart.”
This page was published in April 2025.
About Sabih Behzad
As Global Head of Digital Assets & Currencies Transformation, Sabih Behzad’s job is to develop Deutsche Bank’s overall strategy, identify use cases partnering with the different businesses and execute on Deutsche Bank’s vision. Sabih has a very varied background – he is a charted engineer with a first degree in Computer Systems Engineering and worked in the technology consulting space for a number of years.
Following a MBA from London Business School, he has worked as a M&A banker at Lehman Brothers, Nomura and Deutsche Bank. At Deutsche Bank he had senior roles in strategy, business development and KYC. In short, a mix of technology, strategy and finance.
Georg Berger
… works on international communications projects at Deutsche Bank. He is interested in how a tokenised economy might look like and what it would enable.
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