Europe's Cautious View of Tokenized Markets on Display at IDX

At least, that's the view from the International Derivatives Expo (IDX) London 2026, at which passions for all things tokenized were decidedly more in check than would have been at a similar gathering in New York City. 

Regardless, there was uniform agreement that around-the-clock trading will be critical to the future of tokenized assets and traditional derivatives markets.

"Retail [investors], especially young investors, have come to expect always-on markets in every aspect of their lives," said Walt Lukken, president and chief executive of the Futures Industry Association (FIA), which hosts and organizes IDX. 

"Crypto exchanges already trade continuously, and they are rapidly expanding into conventional markets," Lukken said.

In the US, traditional exchanges have enthusiastically embraced tokenization. In April, the New York Stock Exchange won regulatory approval to trade tokenized listed equities 24/7 with near-instant settlement, while Nasdaq cleared a similar path in March for tokenized Russell 1000 stocks and major exchange-traded funds (ETFs). Asset manager BlackRock has continued expanding its onchain offerings, while its flagship tokenized Treasury fund, BUIDL, has grown to roughly $2.3bn in assets under management, according to industry trackers in June.  

At IDX, however, which drew many leaders from traditional financial institutions across Europe, an audience poll found that only 21% of onlookers saw tokenization and distributed ledger technology (DLT) as innovations that would make the greatest impact on traditional capital markets.

"DLTs have been here for years," said Gaspard Bonin, deputy global head of derivatives execution and clearing at BNP Paribas, during a panel at the conference on 16 Jun. "It's still a bit of a solution looking for a problem."

Lukken echoed a view shared by many executives throughout the conference: "Continuous trading is the easy part. Clearing poses the greater challenge." 

The road to effective tokenization 

Bonin's panel on European competitiveness underscored the gap between European and US views on tokenization. Corentine Poilvet-Clediere, CEO of LCH SA – a subsidiary of the London Stock Exchange Group (LSEG) – framed tokenization as a development that has a long way to go before it could be effective.  

"We have a misconception that as tokenization of plastic assets develops and the main consequence [would be] erasing some of the friction around settlement," she said. "Markets don't become better because they are open longer." 

The fragmented nature of the market helps explain the muted response to tokenization's potential impact on capital markets. Many in the derivatives industry view Europe's clearing houses as a key bellwether for institutional adoption.

A clearing house sits between buyers and sellers in financial markets, guaranteeing trades even if one party defaults. In derivatives markets, the clearing house effectively becomes the buyer to every seller and the seller to every buyer, reducing counterparty risk and ensuring contracts are settled as agreed.

In the US, clearing house DTCC has already made moves in this direction, announcing its tokenization service in December 2025.   

Lukken was less concerned by the fragmentation that troubles some market participants, arguing that competition and consolidation are natural parts of any emerging market.

"In early development, you'll see lots of competitors," he said. "But as firms compete, you'll start to see consolidation and liquidity starts to gather. As we say in our industry, liquidity begets liquidity. The more liquid your market, the better prices you get."

Always on de-risking  

Beyond clearing house adoption, panellists agreed that for 24/7 tokenized markets to work, the risk machinery around them has to run continuously. The hardest problem is the weekend, when the clearing cycles and margin calls that de-risk the system cannot run because the wholesale payment and funding markets are closed.  

The current workaround – pre-funding positions on Friday for potential weekend volatility – is, in Lukken's words, "very imprecise." What he would rather see is "real-time margining happening over the weekend that would allow the movement of collateral."   

In addition, Poilvet-Clediere argued that improving the quality of the market would be key, calling for a deepening of liquidity and improving the reliability of pricing. Hours should only be extended as fast as those improvements allow, she said. "I would take four more hours with an actual high-quality market rather than 20% of fragility."  

With pressure from clients looking at institutions across the pond, the urgency to develop tokenized solutions is rising. But, as Lukken warned in his opening remarks, the technology itself is not the hard part. "As we climb this peak, we need to coordinate with exchanges, clearing houses and regulators on risk control and market protections."