Asset Tokenization Studio Tutorial on Hedera for Digital Securities

Tokenized Real World Assets (RWAs) are digital representations of physical or financial assets (like stocks, gold, or real estate) issued on blockchain technology, offering a more efficient alternative to traditional asset issuance and trading by automating intermediary functions; RWAs can be categorized as either native (issued directly on blockchain without physical backing, like company stocks or CBDCs) or non-native (backed one-to-one by equivalent real-world assets held in custody, like tokenized gold); they exist on two types of blockchains—permissioned (controlled by financial institutions for regulatory compliance) and permissionless (open to anyone with internet access)—with current RWAs predominantly on permissionless chains but expected to migrate to permissioned ones as institutional capital flows increase.

Major financial institutions are expanding institutional access to tokenized assets through strategic custody partnerships. Zodiac Custody, backed by Standard Chartered and SBI Holdings, partnered with Securitize to expand institutional access to tokenized assets. This collaboration enables Zodiac Custody to leverage its bank-grade cold storage custody solutions to support trading of tokenized real-world assets. Northern Trust and National Australia Bank also inked a partnership with Securitize to provide compliant crypto custody solutions for tokenized assets including BlackRock's USD Institutional Digital Liquidity Fund. These developments represent institutional recognition of tokenization's transformative potential for both traditional financial institutions and digital asset-native businesses.

Ripple has announced a new custody solution for major banks including DBS, Societe Generale, and BBVA, featuring preconfigured operational frameworks, HSM options, XRPL fungible token support, and compliance services via Elliptic. This represents Ripple's strategy to bring bank-grade custody to fintech and crypto businesses. The announcement is part of Ripple's broader path toward becoming a financial institution, combining their existing financial licenses with crypto expertise. The company aims to offer simple XRPL integration for tokenizing real world assets, with the CEO of Arca estimating 30-50 trillion dollars could potentially be tokenized on the XRPL.

RWA integration and DeFi innovation represent critical investment areas. Axlr connects 69 chains focusing on institutional liquidity through XRP Ledger, Stellar, Sui, Ton, and Hedera integrations, attracting partnerships with Singapore's Project Guardian, Onyx by JP Morgan, MasterCard, and Deutsche Bank. Clearpool operates the first decentralized credit marketplace serving over $100M TVL with Hex Trust custody backing. Ampleforth, an OG DeFi protocol dating to 2019, invented rebasing tokens and maintains five-year operational stability. The Spot protocol aims to create a flat coin beating inflation while remaining more stable than commodities, with TVL expected to grow from $23-30M to over $50M through bootstrap programs.

The access point for all financial institutions to crypto will be through a custodial provider or through a wallet. This depends on the custodian's ability to integrate natively within DeFi or create robust infrastructure for trust-minimized access to yield. TradFi is starting to integrate with DeFi through acquisition, with several billion-dollar plus acquisitions in the past six months. The integration between TradFi and DeFi will bring RWA (Real World Assets) online, combining yield from RWA with cryptonative forms of yield. This will dramatically increase accessibility of yield opportunities both in the US and worldwide. People who normally only have mobile phones without real financial wealth services infrastructure will now have access to high-integrity yield opportunities.

Enterprises do not choose identity systems based on payment tokens. Identity is a governance, audit, compliance, and interoperability problem, not a token problem. Hedera provides verifiable credentials, DID methods, enterprise governance, immutable audit logs, state proofs, tokenization, and identity workflows. Enterprises require trust anchors (Google, IBM, LG, Dell, Deutsche Telecom, Standard Bank, Namura) rather than payment tokens. Enterprises want consolidated platforms with multi-function infrastructure, not single-purpose rails. Hedera is an enterprise trust substrate (the internet of trust) while Metallicus is a consumer payments plus compliance rail. Hedera is used by enterprises for ESG compliance, supply chain compliance, Pharma compliance, government identity pilots, regulated tokenization, audit-grade logging, and other enterprise deployments. Compliance requires identity frameworks, audit logs, governance, regulatory alignment, permission workflows, tokenization standards, and data integrity. Hedera has all of this natively at enterprise grade. Layer zero is a network topology, not a value driver. Layer zero only describes how chains connect, not what economic role the token plays. A layer zero can be high velocity, low value, consumer-oriented, non-collateral, and non-systemic. Layer number does not equal value density.

Digital identity consists of unique identifiers and credentials (driver's licenses, passports, degrees). The goal is transitioning from analog, human-readable systems to machine-readable, verifiable digital identities. Decentralized identity platforms address siloed data problems in banking (sharing identities across divisions) and education (verifiable credentials in digital wallets). Verifiable credentials function as universal data vessels—JSON documents with digital signatures enabling origin verification. This serves as a universal power adapter for systems integration, solving fundamental data exchange problems by providing universal authentication. It also improves data security by eliminating centralized data silos that create honeypots for attackers. For Real World Asset tokenization, decentralized identity standardizes metadata attached to NFTs through digital product passports, enabling auditors to verify claims and regulators to trust them. This enables tokenization of physical goods and batch-based assets like renewable energy. Decentralized identity enables organizations to prove legitimacy through verifiable credentials, shifting from trust-based to verification-based systems. For AI and deepfake challenges, it provides solutions through cryptographic authentication and QR code-based verification, enabling fine-grained authorization for AI agents. The most significant current adoption is in supply chain traceability, driven by EU regulations. Barriers to adoption include lack of pressing need in most systems where current approaches work adequately. Widespread implementation enables true self-sovereignty but risks state control if not properly implemented.

AcaPy (formerly Indy-Aries) is an extensible agent framework enabling developers to build identity services using public credentials. It supports standards through plugins, provides HTTP API access for integration with applications in any language, and enables adding new DID methods. Hedera is a proof-of-stake public blockchain offering 10,000 TPS, energy efficiency, and carbon-negative operations. The Hedera consensus service enables publishing messages with up to 1,024-byte payloads, ideal for identity applications. The Hedera plugin for AcaPy implements the Hedera ID method through a modular architecture: common modules for plugin registration, separate ID modules for resolver and method class implementations, and AnonCreds modules for credential registry. Integration leverages Hedera's consensus service and mirror nodes, using HCS1 standard for storing large files with chunking, compression, and integrity checks. Hedera DIDs are stored as operation events (create, update, deactivate) rather than standalone documents, with caching strategies exploiting consensus message ordering. AnonCreds resources use immutable HCS1 storage with dedicated topics for revocation events.

DID (Decentralized Identity) is being added to the XRP Ledger as a critical feature for institutional adoption. Regulated institutions must verify their customers and know who they are interacting with, which is a compliance requirement that cannot be avoided. DID allows institutions to assign credentials to specific wallet addresses, enabling them to claim that a wallet has passed appropriate accreditations such as being an accredited investor, qualified participant, business C Corp, or US customer. This credential system provides tags that can be applied to wallet addresses, ensuring that every time a wallet interacts with a regulated system, it can be verified that the wallet has passed appropriate accreditation standards. This approach differs fundamentally from the rest of the crypto industry, which prioritizes anonymity and seeks to skirt regulations.

Major blockchain projects are implementing decentralized identity solutions. XRP's DID amendment (XLS40, 85.71% validator approval) allows users to maintain identity control without centralized authorities, functioning like fingerprints for verifiable credentials. Stellar's X-Ray upgrade (Protocol 25) introduced BN254 and Poseidon cryptographic primitives for confidential transactions while reducing zero-knowledge proof overhead, positioning 2026 as the year for ZK proofs. Hedera provides decentralized identifiers with no single points of failure, supporting GDPR-compliant verifiable credentials. These projects represent converging efforts to give individuals sovereignty over their digital identities while meeting institutional compliance requirements.

Tokenized securities require support for the complete lifecycle beyond issuance and trading. This includes distributing dividends and revenues, handling bankruptcy proceedings, managing rights issues, warrant options, shareholder meetings, proxy voting, and other corporate actions. The speaker emphasizes that 99% of a security's lifetime is spent in corporate actions rather than trading. Effective solutions must address the full lifecycle to provide real value to clients. The business drivers include distributed systems, cross-jurisdictional operations, multiple regulations, privacy requirements, and the need to handle multiple operators, broker dealers, and legal firms.

The corporate action lifecycle involves multiple participants: The Company (issuer) announces events; Domestic Exchanges register and prepare; Custodian Banks (BNY, JP Morgan, Goldman Sachs) process payments; Registrars communicate between custodians and brokers; Stock Exchanges adjust event values. Standardized messaging like MT564 validates events. Tax treaties between countries determine withholding tax rates for cross-border investments. Different markets have specific requirements: Japanese markets announce dividends quarterly, Taiwanese markets have withholding taxes, and critical markets like Spain, France, Sweden, and Italy require special attention for settlement. Depository systems like DTCC (US) and NSDL (India) maintain position records and facilitate communication between companies, government agencies, and brokers.

The federal securities laws provide the best framework for digital asset activities throughout their lifecycle, applicable internationally with regulators in Hong Kong, Japan, and Singapore recognizing the connection between securities regulation and virtual currency. The Dow Report in July 2017 clarified that digital assets should be treated as securities, enabling companies with legal expertise to build compliant platforms. Prometheum's platform enables all securities activities on chain: creation, capital raising, secondary trading through an Alternative Trading System (ATS), post-trade clearance and settlement, and custody. The key advantage is automated reconciliation and settlement through smart contracts, which should eliminate most broken trades. This enables instantaneous settlement using stable coins and 24/7/365 trading without waiting for weekends or holidays.

Securities have evolved from paper (bearer instruments) to electronic (T+2 settlement) to digital (instant settlement with verifiable ownership). Digital securities enable peer-to-peer transfers, self-custody, and on-chain distributions of dividends and coupons. The Liquid Network serves as a Central Securities Depository recording share ownership and preventing duplication. Market standards differ from traditional regulation by emphasizing community-driven, code-based rules rather than committee decisions. Programmatic compliance embeds regulatory requirements into smart contracts, creating continuous enforcement rather than periodic reviews. The framework includes granular voting rights and fractionalization enabling investors at any scale to participate. This represents a fundamental shift from human committees to automated systems enforcing rules fairly.

NSDL provides comprehensive services for electronic securities management and corporate actions. The depository facilitates the electronic conversion of physical share certificates into digital format through verification and online application processes. NSDL handles various corporate actions including bonus share distribution, rights issues, and other shareholder benefits. Companies can use NSDL's services to distribute corporate actions electronically to shareholders, with shares directly credited to shareholders' electronic accounts. This eliminates the need for physical share certificates and streamlines the entire securities management process for both companies and investors.