From 'can we tokenize this?' to 'should we?' - Michael Juul Rugaard on the real value test for asset tokenization

Interview with Michael Juul Rugaard, Founder of Astoval, Creator of TVAC, and Author of Asset Tokenization: The Arrival of a Transformative Trillion-Dollar Industry

Michael, could you tell us about your journey into the field of asset tokenization? What initially drew you to tokenization and to the idea of representing traditionally illiquid or physical assets digitally?

I co-founded a fintech communications agency in 2016, and one of our focus areas became blockchain. In 2018, we were contacted by the Danish founder of MakerDAO, and we were asked to write a report about tokenization of real-world assets. I got totally caught up in this new topic and simply couldn’t let go. So much so that by the beginning of 2019 we launched the tokenization media platform, The Tokenizer, and the Maker Foundation generously helped us with a starting grant.

Your experience and research have culminated, among other things, in your book Asset Tokenization: The Arrival of a Transformative Trillion-Dollar Industry. What can readers expect from the book?

On one hand, the book is a portrayal of the asset tokenization industry and a piece of contemporary history, telling the story of the development of the industry from the very beginning.
On the other hand, it’s an attempt to understand which asset classes seem to be best suited for tokenization in terms of creating added value. Asset classes like financial instruments, real estate, fine art, and private equity are all analysed from this perspective in the book.

Who did you write the book for?

I wrote it for everyone in the industry and for everyone looking from the outside in, trying to grasp what’s going on. As an industry, I believe it is very important to understand where we come from, how things have developed, and, of course, what the possible future perspectives are.

Your book looks beyond financial assets. Where are you seeing meaningful tokenization opportunities outside traditional finance, and where do you see the strongest intersections between tokenization in other industries and the financial system?

Most of the asset types currently suitable for tokenization are found among a variety of financial instruments. They are already digital and operate within well-defined regulatory and institutional frameworks, which can make it easier to identify where tokenization may improve existing processes. And although tokenizing these types of assets is not the most innovative thing you can think of, tokenization in many cases actually has a clear purpose. This is typically to reduce costs by optimising processes such as settlement, reconciliation, and asset lifecycle management and administration.

In other asset classes outside the institutional financial system, the purpose of tokenizing something can be quite different. Raising capital, attracting more investors, and increasing asset liquidity are often important aspects of tokenization cases in areas such as private equity and real estate. However, in some of these areas, the friction is still high, and they are often not as ripe for tokenization as the industry likes to believe.

The thing is that there’s no one-size-fits-all solution when talking about asset tokenization and strictly regulated security tokens. It has become increasingly clear to me that the complexity and the number of moving parts and parameters in tokenization cases mean that you need to be very granular in your analysis and mostly evaluate case by case.

Personally, I hope to see many more cases of what I would call ‘classical’ Security Token Offering (STOs), where private companies use the option of tokenizing company shares to raise capital. I still find the STO a very interesting alternative to VC funding, for instance. However, STOs still come with lots of friction in terms of high costs, substantial risks, and often a very thin secondary market. So even though tokenization can be attractive in many of these cases, the added value of tokenization is still not always convincing. Hopefully, that will change as the market evolves.

The industry has demonstrated that tokenization is technically possible. As such, institutions have moved from ‘Can we tokenize this?’ to ‘Should we tokenize this?’ Where does tokenization create value?

Yes, from a technology perspective, almost anything can be tokenized. But does tokenization always make sense? Are you reducing or adding complexity and costs? These are the relevant questions, and it all comes down to one core question: When does tokenization in a specific case create added value compared to conventional structures and methods?

This was precisely the question that stuck in my mind after writing my tokenization book - I still felt I was missing a sufficient and satisfying answer to that question.

This brings us to TVAC - the Tokenization Value-Add Calculator, which you recently launched. What problem did you see in the market that led you to develop TVAC?

Yes, exactly! TVAC grew directly out of the book and the value-add question. If the focus is changing from ‘can we tokenize’ to ‘should we tokenize’, then we need trustworthy assessment methods for added value.

Still, the problem is that publicly available data often don’t tell you very much about the true value created as a direct consequence of choosing tokenization over conventional methods. Even in apparently positive cases, calculating added value can be challenging. If, for instance, an STO manages to raise EUR 20 million, it looks like a clear success. But you need to ask whether the same EUR 20 million could have been raised more easily or less expensively through, for instance, a private placement. The answer to that question is seldom available or easy to find.

The problem with the asset tokenization market is that it’s still emerging, and the amount of hype surrounding it creates a lot of noise and reduces the credibility of market data. Yes, you can find important statistics from sources such as rwa.xyz, but they will only help you so much. They cannot tell you what the added value is of using tokenization in a specific case.

So, to answer the added-value question, I felt I needed to supplement the existing market data with other methods, and eventually I thought that perhaps I could put added value into a formula. I ended up with this tokenization formula for added value:

Added Value = (New Opportunities + Cost Savings + Risk Reduction) – (Tokenization Costs + New Risks)

This formula became the starting point for the development of TVAC - the Tokenization Value-Add Calculator, which was launched only last month.

Who do you see as the primary users of TVAC?

TVAC is aimed at these tokenization stakeholders: Issuers & Asset Owners, Advisors & Service Providers, and Asset Managers & Financial Institutions.

If you are, for example, a lawyer, consultant, issuance platform, or bank, TVAC enables you to qualify inbound requests from clients on tokenization projects quickly at a very early stage. All that’s needed is to answer ten questions and insert a short description of the project. In around 4 minutes, TVAC delivers a detailed, case-specific report including a tokenization value verdict, stakeholder analysis, risk heat map, and an overview of the advantages and challenges compared with a conventional method.

I should underline that any tokenization assessment, report, score, or other output produced by TVAC should be treated as informational analysis and structured decision-support input only. TVAC does not deliver legal or financial advice and does not replace lawyers or other advisors.

Could you give us some examples of how a bank, fintech, PSP, asset manager, or issuer might use it differently?

Sure. Because TVAC can assess added value across a wide variety of asset cases, the tool applies to several different segments. For instance, many financial institutions are considering tokenization to optimize post-trading processes such as settlement and reconciliation, and TVAC is well calibrated for these cases.

For PSPs, TVAC offers a quick analysis of the possible added value of tokenization in a payment context where stablecoins, tokenized bank deposits, CBDCs, or other forms of tokenized money are assessed against conventional digital payment rails, for instance, for cross-border payments. TVAC offers a detailed analysis of the pros and cons in such cases.

Finally, for asset managers, TVAC offers detailed assessments of the tokenization value of incoming suggestions for portfolio projects. TVAC is able to recognise the unique asset manager challenges and responsibilities towards investors in its analysis.

What are the most important sources of value that institutions should be looking at when assessing a tokenization project?

Well, there are a lot of sources of value as well as sources of opportunities, risks, and costs. As described earlier, TVAC uses its own formula for added value divided into five overall added-value categories: New Opportunities, Cost Savings, Risk Reduction, Tokenization Costs, and New Risks. The first three categories count on the plus side and the last two on the minus side of the equation.

Each of these categories consists of a long list of value drivers that are assessed and weighted according to their relevance in the particular tokenization case. Value drivers included under New Opportunities could, for instance, be access to new investor segments, broader geographic distribution, or fractional ownership. Value drivers included under Cost Savings could be fewer manual processes, reduced reconciliation, or lower settlement costs. On the negative side of the equation, Tokenization Costs and New Risks could include, for instance, legal and regulatory structuring and regulatory uncertainty.

The TVAC engine analyses and calculates all relevant value drivers in order to reach a final estimate of the added value of tokenization for each specific project.

Imagine a PSP considering whether to use stablecoins or another form of tokenized money for cross-border settlement, with the aim of improving speed, liquidity management, and operational efficiency. What questions should the PSP ask before deciding whether tokenized money genuinely improves the existing payment architecture?

Questions regarding the payment side of asset tokenization are increasingly relevant because historically we have seen a tendency to focus primarily on the asset leg and sometimes forget about the cash leg as an equally important part of the picture.

For a PSP considering tokenized money for cross-border settlement, the main question is whether it actually improves the existing payment flow in terms of speed, liquidity, costs, and operational efficiency, without introducing new complexity or risks.

In cases where asset tokenization - not money tokenization - is the starting point and main focus, proper alignment of the asset leg and cash leg is still crucial to realise the full benefits, such as increased settlement speed.

How important is regulatory clarity to moving tokenization from pilots to large-scale institutional adoption?

I would say that hardly anything is as important as regulatory clarity. Tokenization is fundamentally based on a global concept, and realising its full potential requires the ability to operate across borders - ideally with little or no regulatory friction. But the world works differently. Once a technology moves into areas such as securities, regulatory challenges quickly pile up, and regulatory clarity becomes a major obstacle.

And this is precisely the situation facing asset tokenization, and the reason why legal and regulatory costs can account for a significant share of almost any tokenization project.

If I want to raise new capital by tokenizing equity in my company and selling the issued tokens, from a purely commercial perspective the ideal would be to offer them globally, preferably to both professional and retail investors.

However, because I would need to clarify the legal and regulatory position in each individual jurisdiction, a truly global offering could quickly become overwhelmingly complex and disproportionately expensive. In practice, I would most likely have to limit the offering to a small number of jurisdictions, even though, from a purely technical perspective, selling tokens to investors in South America is no more difficult than selling them to investors in the Middle East or Europe.

So yes, regulation is a huge challenge and probably more important than almost anything else for the continued development of asset tokenization globally. I do not think we should have any illusions about achieving global regulatory harmonisation. Instead, the focus should be on creating greater clarity at national and regional levels - for example, within the EU - so that tokenization projects can more quickly understand and navigate the regulatory requirements they need to address.

As we look towards the next few years, which developments do you believe will have the greatest impact on the tokenization market?

First of all, the development of regulation, as we just talked about. Regulatory clarity is highly important across all areas of asset tokenization. But on top of that, the importance of other developments depends more on which part of the asset tokenization industry we are talking about. The development of a vibrant secondary market for security tokens is extremely important for STOs, but not so much for tokenization activities within the financial institutions sector.

Finally, what is one assumption about tokenization that you think the industry is getting wrong today?

The often-heard slogan ‘Tokenization of everything’ is still around, but doesn’t really hold water. Tokenization is only relevant if the result is added value compared with conventional structures, methods, and technologies. Otherwise, it makes little sense. If you analyse specific tokenization structures carefully, you will find that added value is far from always a given - at least not at the current stage of development. The best way of helping the asset tokenization industry is to cut through the noise of hype and introduce a more critical and realistic approach when analysing the potential of tokenization in specific cases.

About author

Michael Juul Rugaard is a Danish entrepreneur, author, and founder and CEO of Astoval, the company behind the Tokenization Value-Add Calculator (TVAC). His career spans payments, financial technology, communications, and asset tokenization. He previously served as Head of Press at Nets, co-founded the Nordic fintech consultancy Norfico, and later founded The Tokenizer. In recent years, his work has focused increasingly on asset tokenization, AI-based analysis, and financial innovation. Recently, he contributed to the anthology Tokenisation of Money (August 2026), published by Springer.