Beyond Bits and Bytes: What Can Be Represented Through Tokenization?
This blog explores how tokenization turns identity, value, ownership, and access into secure digital formats that can move safely across different systems.
In our previous blogs, we explored how tokens have helped societies coordinate value and trust, starting from ancient clay pieces used to track grain and goods. We then looked at how digital transformation unfolds in layers. Digitalization makes information visible and searchable. Dematerialization makes it fully digital and legally valid. Tokenization takes it further by turning value and rights into programmable, portable, and verifiable digital objects.
Now let's dive deeper.
What exactly can we represent through tokens, and why does it matter?
Consider your ordinary passport. It's the small booklet you carry for international travel, primarily used to verify your identity and nationality. While essential, it’s also vulnerable to being lost, stolen, or forged, and manual verification at border control can slow down travel and introduce security risks.
Now imagine upgrading the passport using the key capabilities that digital tokens offer, each one adding new value beyond what is possible today:
Verifiability
Current reality: A physical passport relies on visual inspection, manual stamping, and sometimes scanning an embedded chip in some newer passports. Forgeries are common, and verification checks can be inconsistent.
With tokenization: Your digital passport would carry a unique cryptographic signature that any authorized system could verify instantly, without relying on human judgment.
The impact? Fraud becomes almost impossible. Forged passports are rendered useless. Verification at airports becomes faster, more reliable, and more secure.
Example: A border agent, or even an automated gate, could verify your passport within seconds, just like scanning a QR code but with military-grade authenticity. Recent innovations, like Switzerland’s newly redesigned passport featuring layered UV-reactive security designs, show how physical documents are evolving to incorporate stronger verification features (NDTV, 2025). However, these remain within the realm of physical enhancements. Tokenization takes this a step further by making verification fully digital, programmable, and instantly verifiable across global systems.
Portability
Current reality: You must physically present your passport, get it stamped, and handle updates manually through consulates or immigration offices.
With tokenization: A digital token-based passport could seamlessly sync with immigration databases, travel apps, visa platforms, and hotel systems.
The impact? Travel becomes smoother and more integrated. No need to repeatedly re-enter your details. Real-time tracking and updates happen automatically across systems. Example: If your visa expires mid-trip, a tokenized passport could automatically update embassy records and travel systems without requiring an in-person visit.
Programmability
Current reality: Getting a new visa or changing travel permissions involves manual applications, embassy visits, and paper-based approvals.
With tokenization: Rules could be programmed directly into your passport token, enabling dynamic updates based on travel history, policy changes, or real-time eligibility.
The impact? Instant visa-on-arrival approvals and dynamic travel permission updates become possible, eliminating long administrative delays. Example: Suppose a country updates its visa-free access policy overnight. Your digital passport could immediately reflect the change, allowing you to board flights without last-minute paperwork.
Composability
Current reality: Your passport operates separately from airline tickets, hotel bookings, insurance papers, and health records, causing redundancy and repeated checks.
With tokenization: Your passport could interact programmatically with airline systems, hotel platforms, visa databases, and health certificates.
The impact? Travel experiences become faster, more connected, and much less stressful, with fewer repeated verifications and form fills. Example: When booking a hotel abroad, your passport token could automatically verify your identity, eliminating the need to manually upload ID proofs.
This combination of verifiability, portability, programmability, and composability gives tokens the ability to go beyond being static records. Now let’s take a closer look at what tokens can represent. While there are many ways to categorize tokens, in this introductory piece we are using a function-based framework. This means grouping tokens according to what they are intended to do. We focus on four broad types: identity, value, ownership & rights and access. This approach helps simply the core ideas behind tokenization and highlights how different types of tokens are already being used across sectors to support more secure, efficient, and scalable coordination.
Identity Tokens: Verifiable Identity Across Systems
At their core, identity tokens are digital proofs of who or what something is. They carry verified information about a person, organization, object or more and are designed to be portable, secure, and independently verifiable. Unlike traditional identity systems that rely on paper documents or centralized databases, identity tokens allow users to share only the necessary information in a tamper-proof format that can be trusted across systems. For instance, in the European Union, the Digital Identity Wallet is being introduced under the eIDAS 2.0 regulation. It enables citizens to store and share credentials such as national IDs, diplomas, and medical prescriptions using a single, secure app. These credentials can be used across public and private services throughout the EU without the need to re-verify at every step (European Commission, 2023).
Simply put, Identity tokens ease verification, reduce administrative burden, and give individuals greater control over how their data is used across platforms.
While identity tokens help establish who someone is and what they are entitled to, the next question is how we represent what something is worth in a secure, portable, and programmable way. That is where value tokens come in.
Value Tokens: Representing Portable and Programmable Economic Value
Value tokens represent economic value, but they are much more than just payment tools. They can also represent ownership of real-world assets such as land, property, commodities, or even digital creations like art and collectibles. By embedding value into secure digital formats, value tokens enable faster, more transparent, and more flexible transactions across borders and sectors.
One of the most visible uses of value tokens today is in payments. Consider Project mBridge, a collaboration among the central banks of China, Hong Kong, Thailand, the UAE, and Saudi Arabia. By using tokenized central bank money, mBridge enables real-time cross-border payments and addresses long-standing challenges such as high fees and slow settlement times in international transfers (Bank for International Settlements, 2024). Alongside institutional projects like mBridge, stablecoins have emerged as another form of value token commonly used in everyday transactions. A stablecoin is a digital token pegged to a stable asset, typically a fiat currency like the US dollar. It acts like a digital version of cash that moves faster, works across different platforms, and operates without the need for a traditional bank. You can think of it like a prepaid gift card that maintains its value but can be used instantly across systems. USDC (USD Coin), for instance, is backed by regulated financial institutions and is widely used for cross-border remittances, online commerce, and payments in regions with limited banking access.
Beyond payments, the real transformation lies in the ability of value tokens to represent ownership and legal rights over tangible and intangible assets. For example, through tokenization, a piece of land can be divided into digital shares that are easier to trade, or a digital artwork can be securely authenticated and sold globally through an NFT1. This expands access to investment opportunities, improves transparency, and enhances economic coordination across borders and sectors.
Value tokens are not only making transactions faster and more efficient but are also reshaping how value itself is created, exchanged, and preserved in the digital age.
Let us now take a closer look.
Ownership & Rights Tokens: Enabling Programmable Legal Claims
Ownership and rights tokens represent what a person or organization legally owns or has a claim to. They can cover assets like company shares, property titles, or intellectual property rights (World Economic Forum, 2020). Built to work within trusted legal systems, these tokens can be programmed to automatically structure, transfer, and settle ownership based on predefined rules and agreements.
To see how this works, consider a real-world example. In 2025, real estate developer DAMAC Group partnered with a blockchain platform to tokenize over a billion dollars' worth of property (Reuters, 2025; PR Newswire, 2025). By turning ownership in physical buildings into digital tokens, they allowed individuals to invest in real estate in smaller, more accessible units, similar to buying shares in a company.
Ownership and rights tokens make ownership easier to verify, simpler to transfer, and faster to settle. They help reduce paperwork, automate compliance, and open up new opportunities for people to access trusted ownership across different platforms and countries (World Economic Forum, 2020; Organisation for Economic Co-operation and Development, 2023). In doing so, they are laying the groundwork for a more inclusive and efficient financial system.
Let us now see how tokens are also transforming how access rights are managed, verified, and distributed at scale.
Access Tokens: Facilitating Secure and Programmable Entry
Access tokens allow individuals to interact with systems, services, or resources by granting verified and conditional access. They are increasingly being used in regulated environments to ensure that access rights are programmable, traceable, and secure. Whether tied to humanitarian aid, government services, or verified credentials, access tokens are reshaping how eligibility and entitlements are delivered at scale.
A good example is the UnBlocked Cash Project by Oxfam in Vanuatu. Through this initiative, people affected by disasters received digital access cards that allowed them to make purchases directly from local vendors, with every transaction recorded securely. The project helped reduce aid delivery times by 96 percent and cut administrative costs by around 75 percent. It also made it possible to operate even in areas with limited internet access and expanded to serve over 35,000 people across 11 islands, boosting the local economy (Oxfam, 2022; CALP Network, 2025).
We have now seen how tokens can represent identity, value, ownership, and access in transformative ways.
But technology alone is not enough.
The real challenge lies in ensuring these systems are inclusive, trustworthy, and governed in ways that truly serve people.
Why Inclusion and Governance Matter More Than Tech?
Throughout this piece, we have seen how tokens can represent identity, value, ownership, and access in powerful new ways. But here is the real test: none of it will succeed unless the systems are built to include everyone and are governed with care.
The future of tokenization will not be decided by technology alone. It will be shaped by how easily people can access tokenized systems, how much they trust them, and whether they deliver real benefits compared to traditional finance. Without deep, liquid markets, clear rules, and active collaboration between fintechs, banks, and regulators, even the most advanced technology risks falling into what experts call the "Silent Tokenization Trap" (Baker McKenzie & Deutsche Bank, 2024).
To unlock the full promise of tokenization, deliberate action is needed. Regulations must be harmonized across countries. Markets must be made liquid and accessible. Institutions must invest in building trusted, resilient infrastructure. And critically, people must see clear, tangible advantages in using tokenized systems (Baker McKenzie & Deutsche Bank, 2024).
Inclusion and governance are not technical afterthoughts. They are the foundation for scaling trust. Without them, tokenization risks becoming an isolated innovation instead of the global shift it has the potential to be.
We need to ask some honest questions.
Inclusion and governance will ultimately determine whether tokenization becomes a global breakthrough or remains a niche experiment.
So What Comes Next?
What tokens really offer is a smarter, more flexible way to represent the things we care about. The next breakthroughs will not only be technical. They will also be imaginative.
Think about academic credentials connecting directly to job applications, eliminating delays and duplication.Picture land titles reflecting not just ownership, but shared use and community stewardship.Imagine public benefits adapting in real time as people’s circumstances change.
Of course, not every system needs tokenization. In many contexts, a well-designed database remains effective. But for large, interconnected systems where coordination, transparency, and trust are critical, tokens open up new possibilities. As we move forward, it is not about replacing existing systems but enhancing how they serve people. That future starts with designing for trust and scaling it, one token at a time.
References:
Baker McKenzie, & Deutsche Bank. (2024). The future of tokenization: Global takeover or silent trap? Deutsche Bank Group.
Bank for International Settlements. (2024a). Project mBridge: Connecting economies through CBDC. https://www.bis.org/about/bisih/topics/cbdc/mcbdc_bridge.htm
Bank for International Settlements. (2024b, June 5). Project mBridge reaches MVP stage [Press release]. https://www.bis.org/press/p240605.htm
Biometric Update. (2024, April 3). Zambia moves forward with MOSIP-based digital ID system https://www.biometricupdate.com
European Commission. (2023). European Blockchain Services Infrastructure (EBSI). https://digital-strategy.ec.europa.eu/en/policies/ebsi
European Commission. (2024a). European Digital Identity Wallet: Simplifying secure access to online services. https://data.europa.eu/en/news-events/news/european-digital-identity-wallet-simplifying-secure-access-online-services
European Commission. (2024b, October). Celebrating 3 years of European Digital Credentials for Learning. https://europass.europa.eu/en/news/celebrating-3-years-european-digital-credentials-learning
Monetary Authority of Singapore. (2023). Project Guardian: Pilots in asset tokenization and DeFi applications. https://www.mas.gov.sg/publications/monographs-or-information-paper/2023/project-guardian-policy-lessons
NDTV. (2025, March 17). Switzerland’s latest passport design needs your attention. NDTV. https://www.ndtv.com/travel/switzerland-s-latest-passport-design-needs-your-attention-8022791
Oxfam. (2022). UnBlocked Cash Project: Blockchain technology for humanitarian aid. https://calpnetwork.org/publication/the-unblocked-cash-project-final-evaluation/
Organisation for Economic Co-operation and Development. (2023). Tokenisation of assets and potential implications for financial markets. OECD Publishing. https://doi.org/10.1787/0b19e354-en
PR Newswire. (2025, February 12). DAMAC Group and MANTRA partner to tokenize $1 billion in real estate assets. https://www.prnewswire.com/news-releases/damac-group-and-mantra-partner-to-tokenize-1-billion-in-real-estate-assets-301983216.html
Reuters. (2025, February 12). DAMAC Group partners with MANTRA for real estate tokenization. https://www.reuters.com/business/finance/damac-group-partners-mantra-real-estate-tokenization-2025-02-12/
Scaling Trust. (2024). Beyond bits and bytes: What can be represented through tokenization? Scaling Trust Blog.
Turrin, R. (2024, April 21). The future of tokenization: Global takeover or silent trap? Cashless: Fintech, CBDC, and AI Insights.
World Bank Group. (2024). Digital identity in Zambia: MOSIP implementation progress. https://www.worldbank.org
World Economic Forum. (2020). Global Future Council on Blockchain: Tokenization of assets. World Economic Forum. https://www.weforum.org/reports/tokenization-of-assets-report
World Wide Web Consortium. (2022). Verifiable Credentials Data Model v1.1. https://www.w3.org/TR/vc-data-model/
If you enjoyed reading this blog and would like to receive more such articles from Scaling Trust, please subscribe to our blog using the link below:
Alternatively, know more about us on our website here.
Keep in touch with us on: LinkedIn | X | Telegram | Youtube | Email
NFT (Non-Fungible Token): A digital token stored on a blockchain that proves ownership of a unique item, like art, music, or collectibles. It cannot be copied or replaced.