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Asset tokenization utilizes digital tokens to indicate ownership rights in a physical, real-world asset. Anything can be tokenized, this ranges from real-estate property, jewellery/fine art, to luxury vehicles. Tokenization opens up investment avenues to a new class of investors.
The following are the benefits of asset tokenization:
Wider investor base
Increased geographic reach
Decrease in settlement times
Evolution in regulation
Reduction in cost for reconciliation in securities trading
Enhanced asset liability management
Increases in available collateral
Asset tokenization is set to create a revolution in the way we perceive investments. Tokenization is applicable to regulated financial instruments like bonds and equities, physical assets like real estate property, valuable metals, and even intellectual property. Tokenization improves liquidity and tradability.
Tokenization leverages the potential of blockchain technologies to securitize assets, traded or non-traded. As the tokenization of assets is widely adopted across several domains of industry, investments are being made by several major players.