As tokenisation moves from experimentation to implementation across European capital markets, layering tokenisation onto legacy banking infrastructure risks creating fragmented custody models, operational inefficiencies and mounting regulatory complexity.According to Axiology, the financial technology company specialising in distributed ledger technology (DLT) infrastructure for capital markets, banks and financial institutions pursuing digital asset strategies are approaching a critical strategic decision: whether to manage overlapping regulatory frameworks, such as MiFID II and MiCA, internally, or adopt integrated infrastructure capable of unifying these requirements while enabling true end-to-end control of tokenised assets and workflows.The challenge stems from the evolving regulatory perimeter surrounding tokenised instruments. Tokenised securities, such as shares and bonds, remain subject to MiFID II while crypto-assets not covered by existing financial services legislation fall under MiCA. In practice, many tokenised assets are hybrid and thus classified hierarchically, meaning institutions may need to assess whether a tokenised asset falls under MiFID II or MiCA by following ESMA’s guidelines.Marius Jurgilas, Founder and CEO of Axiology, said: “Banks choosing to manage these requirements internally can retain full control over onboarding, KYC, AML and custody processes within existing banking-grade systems. However, doing so often requires significant investment in distributed ledger technology (DLT) expertise, new compliance infrastructure and operational frameworks capable of bridging traditional finance and digital asset markets.”A number of institutions are partnering with specialist providers to accelerate deployment and gain access to infrastructure already designed for regulated tokenised markets. But relying on multiple disconnected providers can introduce operational fragmentation, particularly where custody, settlement and compliance functions remain separated across systems.“Many institutions are currently trying to bolt tokenisation onto legacy infrastructure that was never designed for digital assets,” added Jurgilas “This can create fragmented custody structures, duplicated compliance processes and operational inefficiencies that will ultimately limit the benefits tokenisation is supposed to deliver.“The real opportunity lies in integrated infrastructure where issuance, trading, settlement and custody operate together within a single regulated environment. Tokenisation should simplify capital markets operations, rather than add new layers of complexity.”Another risk for institutions is the misclassification of tokenised assets. “A security token incorrectly treated under MiCA rather than MiFID II, for example, could expose firms to regulatory breaches and supervisory scrutiny,” continued Jurgilas. “Hybrid assets combining utility and security characteristics further complicate compliance obligations and require careful legal and operational mapping.”Technology-neutral regulation makes integration increasingly important. While MiCA was designed specifically for crypto-assets, European regulators have consistently emphasised that equivalent activities should remain subject to equivalent rules regardless of the underlying technology used.“The industry is now moving beyond proof-of-concept projects. Banks are actively looking at how tokenised assets can operate at institutional scale, and that means solving operational and regulatory questions properly rather than creating parallel systems that sit alongside existing infrastructure,” said Jurgilas.“Institutions need infrastructure that delivers full control across the asset lifecycle while remaining fully aligned with Europe’s regulatory frameworks. The market is maturing quickly, and operational design choices made today will shape competitiveness over the next decade.“Integrated market infrastructure will become increasingly important as European institutions expand tokenisation strategies and move digital assets into mainstream capital markets operations,” concluded Jurgilas.NoYesInfrastructure02 Jun, 2026