This article is part of:Centre for Financial and Monetary Systems

• Tokenization lowers barriers to entry for infrastructure investment by reducing the minimum investment required in bonds.
• Benefits extend beyond financial returns to the community level, where they benefit from improved infrastructure or greater transparency, reducing corruption.
• Challenges remain around viability and accessibility, as not all public works generate revenue, returns can be uncertain and access requires digital literacy and infrastructure.

Every generation searches for the next financial innovation to spark inclusive growth. Microfinance, once hailed as a revolutionary tool, gained global attention when Muhammad Yunus won the Nobel Peace Prize in 2006 for his work with Grameen Bank.

However, subsequent studies revealed its limits – borrowers have suffered from high interest rates and even predatory lending practices.

Today, as the financial system evolves, tokenization has emerged as a promising alternative. Tokenization involves creating a digital representation of a real-world asset, such as real estate or infrastructure, on a blockchain or issuing a digitally native asset that exists solely in digital form.

“Tokenizing public works projects purport to offer a unique “win-win” for investors and communities.”

This process enables fractional ownership, allowing investors to purchase a portion of an asset rather than the whole, thereby lowering barriers to entry for retail investors globally. The World Economic Forum’s recent report on asset tokenization highlights the transformative potential of this technology for financial markets and economic inclusion.

One area of particular promise is public works. This article explores how tokenized public works projects – from roads and bridges to parks and public facilities – could accelerate infrastructure development and drive inclusive growth, especially in emerging economies.

How to invest in public works projects

Public works projects, such as roads, bridges and public parks, are essential for infrastructure development. Traditionally, these projects are funded through a mix of taxes, government budgets and occasionally, private investment. Retail investors have typically been excluded due to high upfront costs and minimum investment thresholds.

Tokenization offers two primary pathways for retail participation:

• Tokenized municipal bonds: these are government-backed debt instruments issued to fund public projects. Municipal bonds typically carry high minimum denominations: e.g. $5,000 in the United States. Tokenizing these bonds reduces the minimum investment size, making them more accessible to a broader range of investors.
• Direct investment in tokenized public works projects: Governments or project sponsors can establish special purpose vehicles that issue tokens on a blockchain, representing fractional ownership or share rights to project revenues (e.g. tolls from a road or fees from a public facility), thereby democratizing access to infrastructure investment and fostering greater community engagement.

Tokenized public works in practice

Several pilot projects illustrate the potential of tokenized public works financing.

In 2018, Berkeley, California, became the first US city to issue tokenized municipal bonds, allowing local residents to invest directly in community projects. In 2024, the University of San Francisco launched its Blockchain Microbond Project, following a similar model.

In Asia, the governments of the Philippines and Thailand have issued tokenized government bonds in 2023 and 2025, respectively. These initiatives have expanded access to infrastructure investment for retail investors and demonstrated the feasibility of blockchain-based public finance.

Benefits and trade-offs

Tokenizing public works projects purport to offer a unique “win-win” for investors and communities. Unlike investing in stocks, which may have little direct impact on an investor’s daily life, investing in public works projects means supporting infrastructure that can tangibly improve one’s immediate surroundings.

For example, by purchasing tokens in a local park or on the road, investors are not only seeking financial returns but also contributing to amenities that they and their neighbours will use.

Key benefits include:

• Lower barriers to entry: Tokenization allows more people to invest in high-value assets, promoting financial inclusion.
• Direct community impact: Investors help fund projects that benefit their own neighbourhoods, creating a sense of ownership and shared value.
• Financial returns: Revenue-generating projects, such as toll roads, can provide income to investors. For non-revenue projects, such as public parks, investors may receive tax benefits or public recognition for their support.
• Enhanced transparency: Blockchain technology enables investors to track how their funds are used, helping to reduce corruption and build trust in public spending.
• Increased liquidity: Tokenization can make traditionally illiquid public works assets more easily bought and sold, allowing investors to trade their holdings more readily and access their capital when needed.

“Tokenization of public works projects has the potential to unlock new sources of capital for infrastructure development and broaden participation in economic growth.”

However, there are important challenges and trade-offs:

• Not all public works projects generate revenue, which may limit their appeal to investors, especially those with limited disposable income.
• Returns on revenue-generating projects are not guaranteed; if a toll road is less popular than expected, investors may not see the anticipated benefits.
• Accessing tokenized investments often requires digital literacy and reliable internet, which isn’t available to everyone.
• Blockchain technology typically involves high upfront costs to establish the infrastructure – the network of computers that sustains the blockchain.
• Governments must clearly disclose how they will guarantee payments and project outcomes to protect investors and maintain confidence.

Holistic engagement

Tokenization of public works projects has the potential to unlock new sources of capital for infrastructure development and broaden participation in economic growth.

While the technology offers clear benefits in terms of accessibility and transparency, realizing its full potential will require addressing regulatory, technological and educational challenges.

A multistakeholder approach, engaging governments, the private sector and civil society, will be essential to ensure that tokenized public works projects deliver inclusive and sustainable outcomes.

Have you read?

• Asset Tokenization in Financial Markets: The Next Generation of Value Exchange
• How will asset tokenization transform the future of finance?
• How tokenization is transforming global finance and investment