Formal Verification of Financial Logic in Compliant Tokenized Asset Systems

Smart contract–based financial systems increasingly underpin tokenized assets, stablecoins, and regulated digital instruments. While blockchain platforms provide deterministic execution and transparency, correctness of embedded financial logic remains a critical risk vector. Errors in issuance, redemption, settlement, or reserve accounting logic can result in irreversible financial loss and regulatory non-compliance. This paper examines the role of formal verification as a foundational security and compliance mechanism for financial smart contracts. We present a structured framework for specifying financial invariants, modeling contract behavior, and applying formal methods to prove correctness across all admissible execution paths. Particular emphasis is placed on asset-backed and compliance-sensitive token systems, where provable guarantees are essential for institutional trust and regulatory alignment. The paper situates formal verification within a defense-in-depth architecture and discusses practical limitations, proof obligations, and future research directions.