[Narrator]

Hello everyone, welcome back to the TokenMinds Training series.
Today we’ll look at how financial institutions can tokenize securities under the new capital framework and how this changes the economics of institutional tokenization.

In this session we’ll focus on two main topics.

First, the new capital rule and how it allows tokenized securities to receive the same regulatory treatment as traditional securities.

Second, the operational infrastructure institutions need to issue, settle, and manage tokenized securities inside existing compliance frameworks.

In March 2026, the Federal Reserve, FDIC, and OCC issued joint guidance on tokenized securities.

The rule is simple: a tokenized security receives the same capital treatment as the traditional version of that asset.

This means the technology used to represent the asset does not change the regulatory requirement.
Whether the security exists on a traditional system or a blockchain network, the asset remains the same from a capital perspective.

Capital rules determine whether a financial product is economically viable.

If tokenized securities required higher capital buffers, treasury desks would avoid them and risk committees would reject them.

With the new guidance, that barrier is removed.
Tokenized securities can now operate under the same capital framework as traditional securities, making adoption much more practical for institutions.

Tokenization improves how securities move and settle.

Settlement can happen in minutes instead of the traditional T+2 cycle.
Each transfer creates a verifiable on-chain record, which simplifies reconciliation.
Assets can also be divided into smaller units, increasing liquidity.
Collateral can move instantly between counterparties instead of waiting for settlement cycles.

These improvements help institutions reduce operational friction and improve capital efficiency.

The first requirement is legal equivalence.

A tokenized security must grant the same legal rights as the traditional asset it represents.

The smart contract mirrors the terms of the underlying security, and a legal opinion confirms that the digital version carries the same rights.

This allows institutions to issue blockchain-based securities while maintaining full regulatory equivalence.

Issuing the token is only the first step.
Institutions also need operational infrastructure.

Wallets must pass AML and sanctions checks before transfers execute.
On-chain transactions must automatically match internal trade records.
Settlement must only execute after all compliance and rule checks are complete.

These controls allow tokenized securities to operate inside institutional workflows without weakening regulatory oversight.

Institutions often do not struggle because blockchain technology fails.
They struggle because the operational layer around issuance, settlement, and compliance is not clearly defined.

Platforms like TMX Tokenize provide that operational layer.

Assets can be issued across multiple networks such as Ethereum, BNB Chain, Stellar, Algorand, and Midnight.
Wallets are screened automatically for AML and sanctions checks before transfers.
And institutions can access the Canton Network ecosystem, which connects major financial institutions and supports large-scale digital asset settlement.

If you are ready to tokenize securities within the new capital framework while maintaining compliance and operational control, reach out to TokenMinds.