Tokenisation, Digital Assets — and the Feeling of Being Left Behind

Thinking Aloud — One Reflection at a Time — by Yuzly Yusof

Sometimes I feel like the world of finance is sprinting ahead while I’m still tying my shoelaces. I’ve spent decades in banking — talking about deposits, financing, risk, Shariah contracts, compliance — and now, suddenly, the industry is talking about “tokenisation” and “digital assets.”

The first time I heard it, I honestly thought it was something to do with arcade tokens. You know, the kind you feed into those old machines just to play a game or two. But apparently, it’s the new language of finance — and whether we like it or not, it’s here.

When I first joined the bank, everything was tangible. We dealt with ledgers, cheques, signatures, and stamp duties. You could smell the paper and feel the weight of a contract. Now, people are talking about representing assets on a blockchain, splitting ownership into “tokens,” and raising funds through “STOs” — security token offerings.

In simpler words — and this is how I finally made sense of it — tokenisation is like taking a big thing and breaking it into many small, tradable pieces, each recorded securely in a digital system. Imagine owning a piece of a building, or a fraction of a sukuk, without having to buy the whole thing. That’s tokenisation. It’s the same old idea of ownership, just done digitally, and (supposedly) more efficiently.

It’s almost poetic, in a way. We used to issue sukuk with reams of documentation, multiple approvals, and long lead times. Now, people are saying you can do it in hours using blockchain. No more couriering documents across borders or waiting for signatures. Everything is instant, transparent, and traceable.

In Malaysia, this isn’t just talk. The Securities Commission (SC) has already licensed a few Digital Asset Exchanges (DAX) — platforms where these tokens can actually be traded. Labuan FSA has come out with its Security Token Offering (STO) Framework, paving the way for tokenised sukuk, digital funds, and even experiments with tokenised waqf.

Even Bank Negara Malaysia has been quietly encouraging innovation through its regulatory sandbox — letting fintechs test blockchain-based solutions for microfinance, cross-border remittances, and supply chain financing.

So, while I’m still trying to wrap my head around the concept, the regulators have already moved forward. The market has moved forward. The world, it seems, has moved forward.

One thing that caught my attention recently was a pilot project exploring tokenised sukuk. The concept is fascinating — imagine issuing sukuk digitally, where investors can buy small portions, hold them securely on a blockchain, and even trade them instantly on a secondary market. The efficiency is undeniable.

And for Islamic finance, it feels like a natural fit. After all, our products are meant to be backed by real assets. Tokenisation, if done properly, could actually enhance transparency — every token could be linked to a real, identifiable asset. That sounds like a Shariah officer’s dream, doesn’t it?

But then the questions begin. Can a token truly represent mal (property) in the Shariah sense? How do we validate ownership when it exists only in digital form? What happens to qabd (possession) when it’s just a string of code?

I read somewhere that blockchain could reinforce Amanah — because it keeps a transparent, immutable record of every transaction. Maybe that’s true. Maybe technology isn’t here to replace trust; maybe it’s here to record it better.

Still, I have to admit — part of me feels slightly out of place in these discussions. The same way my parents once struggled to understand online banking, I now find myself Googling “what is a security token” late at night.

It’s a strange feeling, being both fascinated and slightly intimidated by something new. The market is evolving faster than my comfort zone. But maybe that’s how progress always feels.

I remember when the first digital bank in Malaysia got its licence. We all debated whether customers would trust a bank with no branches. Today, those same banks are onboarding customers in minutes. Maybe tokenisation will go through the same cycle — from curiosity, to confusion, to eventual acceptance.

The funny thing is, I don’t think this shift is about technology alone. It’s about relearning what “ownership” and “trust” mean in a digital world.

When I joined Islamic banking, everything revolved around contracts — aqad, intention, asset, ownership, risk, and delivery. Those principles haven’t changed. What’s changing is how we operationalise them. Maybe the challenge for people like me isn’t to understand the technology in depth, but to make sure our principles still live within it.

After all, Islam has never been anti-innovation. What it has always been is principle-driven. The same rules that guided trade in Madinah should guide digital assets in Malaysia — fairness, transparency, and no exploitation.

Some people say tokenisation will democratise finance — allowing ordinary investors to own small pieces of big assets, like real estate or infrastructure. That sounds wonderful, but it also means we need stronger investor protection and clearer Shariah guidance. Because if the market moves faster than our governance, we might find ourselves building digital castles with weak ethical foundations.

And that’s where I think Islamic finance professionals — especially those of us who’ve been around for a while — still have something valuable to offer. We may not be fluent in blockchain coding, but we understand the meaning of Amanah. We understand what it means to build trust, not just systems.

Maybe that’s our role in this new era — not to compete with the coders, but to guide the ethics behind the code.

So yes, I do feel a little outdated sometimes. I read these reports about tokenised assets, and part of me feels like I’m catching up to a train that’s already left the station. But another part of me feels quietly hopeful — because every time the world changes, it also creates a new opportunity to make faith relevant again.

Perhaps tokenisation is not about replacing what we know, but rediscovering it in a new form. The contracts, the trust, the transparency — they’ve always been there. We’re just finding new ways to express them.

And maybe, just maybe, being a little lost once in a while isn’t such a bad thing. It keeps us learning. It keeps us humble. And in a world, that’s becoming increasingly digital, maybe humility is the one thing that still needs to stay analogue.

“I am not claiming to be right — I am inviting you to think with me”