Tokenisation
Quick Answer
Tokenisation represents real-world assets (property, equity, invoices) as digital tokens on blockchain, enabling global transfer, fractional ownership, and programmable payment models.
Full Definition
Tokenisation is the process of representing a real-world asset (property, equity, commodities, invoices) as a digital token on a blockchain. Tokenised assets inherit blockchain properties — they can be transferred globally, fractionated, traded 24/7, and programmed with smart contract logic. In payments, tokenisation extends the range of assets usable for settlement and enables new payment models like fractional ownership and programmable money.
Related Terms
Testnet
A testnet is a separate blockchain using valueless tokens for development testing. Payment integrations should always be tested on testnets (Sepolia, Amoy) before mainnet deployment.
Token
A token is a digital asset created on an existing blockchain via smart contract standards (ERC-20, BEP-20). Payment gateways convert any supported token to the merchant's settlement preference.
Transaction Fee
Transaction fees combine network fees (gas) and service fees. Crypto gateways typically charge 0.5-1.5% versus card payments' 1.5-3.5%, with even larger savings on cross-border transactions.
Transaction Hash (TxHash)
A transaction hash is a unique hexadecimal identifier for a blockchain transaction, used to track payment status on block explorers and provide irrefutable proof of payment.
Travel Rule
The Travel Rule requires VASPs to share sender/receiver identification for qualifying transactions, originating from FATF Recommendation 16 to prevent money laundering in cross-border crypto.
TVL (Total Value Locked)
TVL is the total crypto deposited in a DeFi protocol's smart contracts. Higher TVL in liquidity pools means deeper liquidity and better exchange rates for payment settlement.