Tokenization of assets is the concept of using blockchain technology to securitize assets. It is the process of issuing a blockchain token that digitally represents a real tradeable asset. The issued “security tokens” are created through a type of initial coin offering – or in this case – security token offering (STO). They can either represent regulated financial instruments (equities, bonds, loans, and funds), tangible assets (real estate, artworks, precious metals), or intellectual property (copyright to works of authorship).
The benefits of tokenization include increased liquidity, faster settlement, lower costs and bolstered risk management. Even private securities or illiquid assets such as fine art can be tokenized and traded on the secondary market. This means that a much larger audience of investors can access them. But what’s more, with high divisibility, investors can purchase tokens that represent only a small percentage of the asset.
Coming together in a “token economy”, these benefits are designed to bring a more efficient and fairer financial world that reduces the traditional barriers to creating, buying, and selling securities. Which companies are working towards this brand new financial system that is more transparent, efficient, and inclusive? We’ve picked out 10 of the highest ranked companies that we track in this space:
Founded in 2013, AlphaPoint is a New York-based company that helps make illiquid assets liquid. It enables customers to launch new products and services by providing solutions to digitize assets, launch markets, and reduce operational costs. It works with a variety of capital market stakeholders, including asset managers, institutional traders, fund or asset owners, family offices, software companies, and other organizations in the digital asset ecosystem.
The Commodity Futures Trading Commission chair believes that ether (ETH) is a commodity, according to Yahoo Finance.
The Ethereum community is divided on the best way to handle the imminent launch of Ethereum 2.0. The most likely scenario will see Ethereum and Ethereum 2.0 run as two separate but connected blockchains, each with its own token. An alternative scenario would see Ethereum incorporated as a shard of Ethereum 2.0. The situation has some similarities to the contentious Bitcoin Segwit2x debates of 2017.
The Board of the International Organization of Securities Commissions (IOSCO) has published this Consultation Report on Crypto-Asset Trading Platforms to encourage the public to comment on the identified issues, risks, key considerations and related toolkits.
AlphaPoint offers insight into more widespread adoption of cryptocurrency trading in the institutional space, along with other industry executives from Gemini, Nasdaq, and CoinMarketCap.
