Banks Require Tokenization to Be Commercially Viable

The Cardano Foundation's Sandro Knöpfel explained why banks say yes to tokenization at the European Blockchain Convention in Barcelona.

According to Knöpfel, a bank doesn't say yes to a token, but rather to something its clients will buy that still fits the plumbing it already runs. This means that the token must sit inside the stack the bank already uses, and create no additional friction for the bank.

Knöpfel emphasized that tokenization is not just about creating a new asset, but about giving eligible clients more efficient access to specialist strategies that may not otherwise be available through conventional products. This can also provide an additional route to institutional capital and risk-transfer capacity for the risk-originating side.

The Cardano Foundation has been exploring this approach with MembersCap, a Bermuda-regulated manager behind a reinsurance fund that targets 10% returns and uses blockchain to extend what clients already offer. The fund's minimum ticket is $50,000 for qualified investors, making it more accessible than traditional private reinsurance strategies.