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“Tokenisation is actually relatively simple for most asset classes,” explains James Burnie, partner at gunnercooke LLP. “And it’s been spectacularly overhyped by lots of lawyers into how complicated it is.”

Lest anyone be tempted to ascribe this behaviour as typical of the profession, Burnie is certainly different in this regard. Even though Burnie has been in crypto for the better part of a decade – he advised on the first successful UK-based ICO and has written crypto regulation for parts of Africa and central Asia among others – he describes himself as a regulatory lawyer at heart.

In regulatory, he picked what he called the ‘most complicated, geeky, hard-to-understand’ topic he could find – which also happened to be the most interesting to him. Crypto was a natural evolution from there. “[People] looked at me like I had a square head… it’s gone from being quirky to now at last heading towards the mainstream,” he says.

Yet one major problem Burnie sees right now is in those who are fully taken in by the buzzword; they tokenise an asset without much thought as to whether people actually want to buy it. “We’re seeing an interesting mix at the moment, because we’re seeing stablecoins becoming more and more prevalent,” he explains. “You’ve got the tokenised brigade who are tokenising assets, but with not necessarily a clear path to market and a clear distribution challenge.”

Burnie outlines a theoretical use case which could combine the two. Take a wine merchant whose import business hinges on the risk they take between the fiat value and value of wine each year. “If you combine the concept of a stablecoin with the concept of tokenised wine, you can create something like a wine coin, which means if you’re a wine merchant, you can effectively have a token which you trade in for payments in your industry, which will track the value of the commodities in that industry and then remove the FX risk from the industry,” says Burnie.

“That’s where I think we’re headed next – after we discover there’s an issue into who wants to buy the tokens, and [the] issue of how many stablecoins we need,” he adds. “That’s going to be the next wave of innovation in my view.”

Real estate remains one of the higher potential areas for tokenisation. The Deloitte Center for Financial Services, in a widely-repeated data point, predicts that $4 trillion of real estate will be tokenised by 2035, up from less than $300 billion in 2024.

In Dubai – where the Land Department’s own estimates suggest tokenised real estate could account for 7% of the city’s total property transactions by 2033; the Prypco Mint platform for now only deals in dirham transactions, but with plans to expand globally in the near future. But what implications will this have?

Burnie cites the UAE, the UK, where people ‘tend to trust the Land Registry’, and Honduras – where plans a decade ago to register all of the country’s property on blockchain were ultimately aborted – as examples of the difficulty in getting a global outlook.

“If an entire country decides to put its real estate on-chain, which is not impossible, then we’re getting a whole lot of real estate on-chain,” explains Burnie. “Quite why that’s so earth-shattering in one sense for the private sector is a question, because all you’re doing is automating the process… it’s fantastic in terms of use of blockchain, but ‘what are we trying to achieve here?’ is always the question.”

From a pure regulatory perspective, Burnie notes you’ve ‘got to be very careful you’re not spending a lot of money just reinventing the wheel.’ “The securities rules in most jurisdictions do not have an exemption which goes ‘if you stick it on a blockchain you’re no longer regulated’; they just go ‘does it meet the following criteria?’” says Burnie. “If it is, they’ll regulate it.”

The geopolitics concerning the space right now are intriguing – and particularly so for the UK, Burnie notes. The second Trump administration, widely anticipated before taking office to be crypto- and digital asset-friendly, signed the GENIUS Act into law in July, creating the first federal regulatory system for stablecoins and promising to make America the ‘undisputed leader in digital assets.’

Burnie explains that the US’ approach is innovate first, then regulate when a roadblock appears. The EU is the complete opposite, with the EU AI Act, currently being rolled out, a good example.  The UK is therefore in the rather delicate spot of being somewhere in between. Initially for crypto – in other words, pre-Brexit – the UK followed Europe; but Burnie argues the AI Act shows how the UK is following the US. The majority of stablecoins being linked to the US dollar adds to the intrigue.

“There is a massive inflection point currently in crypto in terms of ‘are we going to follow the US or EU?’, and we simply don’t know which way it’s going, because effectively there’s a huge push both ways,” says Burnie. “The US love stablecoins because most of them are linked to the US dollar. The EU has taken a more anti-stablecoin approach because it sees itself as a potential loser in this; hence legislation on forcing you to hold assets in the EU with EU banks if you want to issue stablecoins to the EU.

“The UK currently is trying to figure out where it fits in this,” adds Burnie. “This is why it’s got so interesting on the political stage, because the basic assumption now as it’s gone mainstream… what is freaking a lot of large industries at the moment is not only the ability to go mainstream, but the ability to take out and replace a lot of the mainstream activity.”

As an example of mainstream activity, gunnercooke accepts payments in crypto. Settlement takes less than 10 minutes, rather than a week. This leads into its own pros and cons depending on where you stand, from those who appreciate the speed and improved exchange rate, to those who note the importance for banking infrastructure to make money. “This is where you get into this bit where you get to re-evaluate your way of doing things,” explains Burnie. “There are big political questions this walks into.”

Such questions, among many others, will come to the fore at Tokenize:LDN, where Burnie is speaking on December 2-3. As he sees it, it is an excellent time for such a gathering to take place. But what advice does he have for those looking to move into this space – and hope not to be confused by over-complication? 

“My advice is – find a thing. It could be tokenisation, it could be something else,” says Burnie. “Make that thing narrow so you don’t try and understand the whole of Web3, because it’s a huge and scary place for you to try and do it all at once. Understand that thing. Go gently. Get the right advisors, and then gently walk into it in a way which means that effectively it’s a measured process and it’s contained, and it fits through your business model and your target model.”