Tokenization has long been a fashionable word for crypto enthusiasts, which has supported for years that assets based on blockchain will modify the underlying infrastructure of the financial markets.
Technology is considered a rapid increase in the coming years, especially in the United States, helped by the adoption of three new bills.
The administration of President Donald Trump has reduced the regulation of the broader cryptography industry, paving the way for a boom in the evaluation of companies in the sector and the rapid growth of securities linked to crypto.
However, the growth of the tokenized asset market has been much slower than expected in recent years, many projects to their stammerings or not yet live.
How does tokenization work?
The term “tokenization” is used in various ways, but it generally refers to the process of transformation of financial assets – such as bank deposits, actions, obligations, funds and even real estate – in cryptographic assets.
This means creating a recording on a digital registry blockchain which represents the original asset.
These assets based on the blockchain, or “tokens”, can be held in cryptographic wallets and exchanged on the blockchain, just like cryptocurrencies.
Where do Stablecoins enter?
Stablecoins can be considered as an example of tokenization. They are a type of cryptocurrency designed to maintain constant value by being fixed to a real currency, generally the US dollar. The transmitter holds an American dollar in reserve for each crypto-put toy toil to a dollar that he creates.
Stablecoins are blockchain -based tokens acting as an indirect indicator of an asset that already exists outside the blockchain.
They allow people to move money through borders without interacting with the banking system. While criticisms say that this makes them useful for criminals who want to avoid the anti-balance checks of banks, stablecoin issuers say that they are a rescue buoy for residents of countries without a developed payment system.
Are tokenized assets taken off?
Yes and no. Stablecoins have increased in recent years, the market estimated at around $ 256 billion, according to the Crypto CoinmarketCap data supplier, and should affect 2 dollars by 2028, according to Standard Charterd.
But banks have spoken for years of the creation of tokénized versions of other types of assets, which, according to them, will make trading more efficient, faster and cheaper, and these “tokens” have struggled to gain ground.
Although there have been individual emissions, there is no liquid secondary market for this type of asset.
An obstacle to the negotiation of traditional assets via blockchain is that banks work on their own private networks, which makes trade difficult on all platforms.
What are the tokenization pros?
Some supporters of the cryptographic industry have declared that tokenization can improve the liquidity of the financial system. Non -liquid assets like real estate could be exchanged more easily if they are divided into small digital tokens.
It should also improve access to asset classes which are generally out of reach of small investors by creating a cheaper entry point.
What companies are interested in tokenization?
Some major world banks, including Bank of America and Citi, have said they could explore the launch of tokenized assets, including stablecoins.
The Director of BlackRock Active Authorities also doubles on the Boom des Tokenization and highlighted his ambition to become the largest cryptocurrency manager in the world by 2030.
Coinbase, the greatest exchange of American crypto, asks for permission from the dry to offer “token actions” to its customers.
How does the new regulation help tokenization?
Since the stablecoins themselves are tokens and considered one of the largest engines of tokenization growth, the new Stablescoin law will eventually stimulate the proliferation of tokenization, according to experts.
The new bill on the structure of the market, known as Clarity Act, should establish a clear framework which could allow stablecoins and other cryptographic tokens to be more widely used.
What are the risks?
Some analysts say that media threshing around tokenization could be premature and cautious that the rapidly growing cryptography ecosystem could undergo short -term turbulence due to the potential risks of a sharp drop in prices.
The president of the European Central Bank, Christine Lagarde, warned the stablescoins to present risks for monetary policy and financial stability.
Certain criticisms of the industry warn the frenzy around the new technology could introduce new systemic risks, in particular in the absence of strict regulations. They also say that there is no reason why blockchain should be more effective than electronic books and trading systems already used in the financial markets.
Third -party tokens buyers, who are issued by unconvilly third parties – such as Crypto Exchange Kraken – who have custody of securities, could be exposed to risk of counterparty, and regulators are notes of caution.
Earlier in July, Hester Peirce, Commissioner of Securities and Exchange Commission of the United States who frequently talked positively about cryptocurrency, said that Tokenized titles would not be able to bypass existing securities laws.
More than half of the stables of the US dollar in the world are issued by a single company, Tether, who says that it manages $ 160 billion in reserves, but has not undergone financial audit.
