christyolivia last edited by
Asset tokenization utilizes digital tokens to denote fractional ownership in assets like real estate property, fine art, and valuable metals/stones. There is no restriction as to what can be tokenized. Smart contracts handle ownership rights. Tokenization opens up investment for smaller scale investors, and for existing investors that are intending to diversity. Tokenization is a low-risk investment avenue for the latter.
The following are the advantages provided by asset tokenization:
-> Wider investor base; Tokenization does away with the restrictions placed on fractionalization of an asset. This opens up a larger range of investors to invest in a project
-> Increased geographical influence; Public blockchains, are by design, international in nature. They do not impose barriers on the investor or the international population. Appropriate AML and KYC programs should be followed
-> Reduced settlement times; Tokenization can drastically lessen transaction duration, by enabling 24x7 trade, and smart contracts executed by preset parameters -- essentially real time
-> Infrastructure upgrade; Digitization of several assets on a DLT infrastructure positively impacts efficiency