Governments accelerate state tokenization as Binance founder CZ reveals talks on national assets

Several governments are quietly preparing a new wave of digital finance, with state tokenization emerging at the center of their blockchain strategies.

Binance founder CZ in talks with governments on tokenizing national assets

At the World Economic Forum in Davos, Changpeng Zhao, founder of Binance, confirmed he is in active discussions with more than a dozen governments about tokenizing national assets on public and permissioned blockchains. He framed these negotiations as the logical next phase of crypto adoption after exchanges and stablecoins.

Zhao said that, to date, only two major use cases have truly scaled: centralized and decentralized exchanges, and global stablecoin markets. However, he argued that the industry is now moving into a new chapter focused on state-managed digital assets that sit directly on-chain, rather than solely in private-sector platforms.

“What’s proven at scale: exchanges & stablecoins. The next frontier: State-level tokenization of assets; Crypto as the invisible payment rail; AI agents transacting autonomously, using crypto as…” Zhao said, outlining a roadmap where machine-driven finance and blockchain-based infrastructure converge.

Why governments are embracing upstream tokenization

Zhao emphasized that many other corners of the crypto market still look small, experimental or speculative when compared with traditional finance. That said, governments are now approaching tokenization as a way to move closer to the source of value creation and participate directly in the upside.

According to Zhao, officials want to bring large pools of public assets on-chain, including debt, commodities and real estate. Moreover, they see tokenization as a mechanism to unlock liquidity earlier, widen investor access and recycle proceeds into domestic capital markets and infrastructure projects.

This approach contrasts with earlier private-sector experiments that focused on real-world asset tokens issued by financial firms or fintech startups. Instead, national treasuries and public agencies would oversee the conversion of sovereign assets into digital tokens, changing how public finance interacts with global investors.

How tokenized public assets would work on-chain

Under these emerging models, national assets such as government bonds, oil, gold and public real estate could be represented as blockchain-based instruments. These tokens would support fractional ownership, continuous secondary trading, faster settlement times and automated coupon or dividend payments via smart contracts.

For policymakers, this architecture also promises end-to-end transparency and granular control over issuance, distribution and redemption. Moreover, it keeps a larger share of financial returns, such as interest and trading spreads, within the public sector rather than outsourcing them to intermediaries.

Proponents argue that this form of onchain asset tokenization can broaden participation by allowing retail investors to buy small fractions of previously inaccessible assets. However, it also raises questions about investor protection, governance risks and the robustness of the underlying blockchain infrastructure.

Early state-led pilots from Pakistan to the European Union

Zhao’s remarks come as several jurisdictions move from theory to implementation. In Pakistan, the finance ministry announced plans this month to tokenize up to $2 billion in domestic sovereign debt, a significant step toward reshaping its public debt markets in 2025 and beyond.

Officials in Islamabad describe the initiative as a way to modernize issuance, cut settlement frictions and attract new categories of investors, including retail savers. Moreover, they view it as a potential model for other emerging markets seeking to diversify their funding base using digital infrastructure.

In Europe, the EU’s DLT Pilot Regime already provides a regulatory sandbox for trading and settling tokenized securities. The framework allows market operators to test blockchain-based platforms for bonds, equities and other instruments within a defined rule set, while regulators monitor systemic and operational risks.

The United Kingdom has also signaled intent to move its financial market plumbing onto distributed ledgers. The government has appointed a dedicated official to coordinate the country’s transition to blockchain-based market infrastructure, reflecting London’s ambition to remain competitive as a global capital hub.

Traditional market giants advance tokenization strategies

Momentum is not limited to sovereign initiatives. In the United States, the New York Stock Exchange has confirmed that it is building a platform to support the trading of tokenized stocks and exchange-traded funds. The project envisages 24/7 trading with on-chain settlement, subject to regulatory approvals.

Zhao welcomed the NYSE plan, describing it as a structurally bullish signal for digital assets and for exchanges integrating blockchain rails. However, he also noted that regulatory clarity and investor education remain critical for any large-scale rollout of tokenized securities.

At the same time, the dtcc tokenization program received a notable green light when the US Securities and Exchange Commission issued a rare no-action letter. This allows the Depository Trust and Clearing Corporation to run a controlled tokenization service for US Treasuries, ETFs and Russell 1000 equities.

The service, scheduled for launch in late 2026, will operate on approved blockchains and is designed to ensure that digital representations carry the same legal rights and investor protections as conventional securities. Moreover, DTCC positions this move as an evolution of post-trade infrastructure rather than a wholesale replacement.

From payments to invisible rails and AI-driven finance

Zhao also linked the spread of tokenized assets to deeper structural changes in payments. He highlighted that crypto is already used at scale for cross-border transfers and settlement, particularly through stablecoins that move across multiple networks and geographies.

Looking ahead, Zhao predicted a shift toward “invisible payments” in which end users continue to transact in fiat currencies, while crypto-based rails handle clearing and settlement in the background. Moreover, he suggested that autonomous AI agents will eventually execute transactions on their own, using digital assets as their native funding layer.

In this vision, state tokenization becomes one piece of a broader architecture where public and private assets coexist on interoperable blockchains. However, this scenario would require common technical standards, robust identity frameworks and cross-border regulatory cooperation.

On-chain gold shows real-world traction for tokenized markets

Market data indicates that tokenization is already gaining measurable traction in at least one asset class: gold. Tokenized gold products added nearly $2.8 billion in net value in 2025, according to analysts tracking on-chain metals markets.

Over the same period, total market capitalization for these products rose by 177% year over year, while trading volumes climbed to levels comparable with some of the world’s major gold investment vehicles. Moreover, this suggests that digital wrappers are beginning to absorb liquidity that previously flowed through conventional exchange-traded products and over-the-counter markets.

Analysts see the growth of tokenized gold as an important proof of concept for broader government tokenization plans, including tokenized government bonds and public real estate. However, they caution that scaling such models into multi-trillion-dollar sovereign markets will require careful attention to cybersecurity, custody and legal enforceability.

Implications for exchanges, investors and public markets

The shift toward digitally native sovereign assets could reshape how exchanges, custodians and asset managers operate. Platforms that can support tokenizing national assets, provide compliant custody and integrate with existing clearing systems may gain a strategic advantage as capital gradually migrates on-chain.

For investors, the rise of tokenized instruments may bring 24/7 access, lower settlement risk and finer-grained portfolio construction. Moreover, it could allow smaller investors in both developed and emerging markets to access instruments once reserved for large institutions or wealthier clients.

At the same time, regulators will face new challenges in monitoring markets that operate around the clock and across fragmented blockchain networks. That said, the transparency of on-chain data may eventually give supervisors better tools to track systemic risks, market abuse and liquidity conditions in real time.

In summary, Zhao’s disclosure of ongoing talks with multiple governments underscores how tokenization is rapidly moving from experimental pilots to the core of public finance. If current initiatives in Pakistan, Europe and the United States proceed as planned, the coming years could see national debt, commodities and equities increasingly issued and traded directly on blockchain infrastructure.