Why tokenization alone does not create liquidity, where tokenized securities can trade, how markets are made, how prices are reported, and how to plan exits honestly.
Tokenized is not liquid
- Liquidity needs buyers, a venue and reliable price information.
- Many tokenized assets are held to maturity and rarely trade.
- Small, specialised assets stay illiquid on any technology.
Where tokens can trade
- Security tokens trade on licensed venues, such as multilateral trading facilities or Swiss DLT trading facilities.
- The EU DLT Pilot Regime, in place since March 2023, lets market infrastructures run DLT-based trading and settlement under tailored rules.
- Direct transfers between investors are possible, but eligibility rules still apply.
How markets are made
- Market makers quote buy and sell prices, for a fee or a spread.
- Some issuers offer redemption windows or buy-backs.
- Bulletin boards match buyers and sellers without continuous trading.
Prices and reporting
- Separate the reported value (for example a fund's net asset value) from the last traded price.
- Publish how the asset is valued and how often.
- A price nobody can trade at is not a market price.
Planning exits
- Describe the exit routes in the documents: sale, redemption, maturity.
- Never promise liquidity you cannot deliver.
- Match the asset's life to what investors expect.
Key takeaways
- A token needs buyers and a venue to be liquid.
- Security tokens trade on licensed venues, with investor checks.
- Promise exit routes, not liquidity.
Sources
- Regulation (EU) 2022/858 (DLT Pilot Regime), EUR-Lex
- Swiss Financial Market Infrastructure Act (FinMIA), Fedlex
Educational content only, not legal, tax or investment advice. Based on EU and Swiss rules as of September 2026. Check the official texts before relying on anything here.