As financial markets modernize, terms like digitization, tokenization, and native issuance are often used interchangeably. In reality, they describe very different stages of evolution. Confusing them leads to false assumptions about what blockchain technology actually solves. To understand how real-world assets move into the digital economy, it is important to distinguish between surface-level improvements and true infrastructure change.
Digitization is the most basic step in this process. It converts physical or paper-based financial assets into electronic records, making them easier to store, access, and transfer. However, the asset itself does not change. Settlement, custody, and reconciliation still depend on traditional institutions such as central securities depositories and clearinghouses. Digitization improves convenience, not efficiency at the market structure level.
Tokenization builds on digitization by adding programmability. Assets can be fractionalized, automated, and integrated with smart contracts, opening new possibilities for access and interaction. Despite these improvements, the underlying asset still exists off-chain and must be held by a regulated custodian. This creates ongoing reconciliation between the token and the real asset, keeping costs high and settlement slow. Tokenization modernizes the interface, but not the foundation.
Native issuance represents a fundamental shift. In this model, the asset is created directly on the blockchain and exists entirely on-chain. There is no off-chain counterpart and no need for reconciliation. Issuance, transfer, clearing, and settlement all happen within the same system, enabling near-instant finality and removing reliance on intermediaries. This is where true disintermediation becomes possible.
The differences between these approaches have real consequences. Digitized and tokenized assets remain tied to legacy infrastructure, introducing delays, higher costs, and settlement risk. Tokenization offers incremental improvements, but native issuance changes how markets function by eliminating manual processes and custodial dependencies. This leads to faster settlement, lower operational risk, and improved market liquidity.
Dusk is built around this native issuance model. Rather than layering tokenization on top of outdated systems, Dusk rethinks the entire financial stack, including settlement and compliance. Its protocol is designed for fast finality, privacy, and regulatory alignment, meeting the standards required for institutional markets. By enabling assets to be issued, traded, and settled natively on-chain, Dusk is laying the groundwork for a truly modern and disintermediated financial market infrastructure.#dusk
