Even though many people are still not buying it, the tokenization of asset-backed securities is likely to be one of the biggest stories of 2019 and the years beyond.
In reality, this process is likely to remodel how investors value their assets and how they think about them going forward.
The driving force behind the outbreak of the archaic, “Wall Street” market is the growth of cryptocurrencies and the innovative Blockchain technology. Until now, both technologies have been an area of early adopters and entrepreneurs, however, they are about to move from the edge of our financial life to permanent components in our existence.
Gladly, there are several nations that already have developed legal frameworks adapted into the new blockchain market standards.
Switzerland and Malta are a great example of a successful blockchain adoption, including solid tokenization applications.
Let me share 3 features of the traditional investment that would be changed for good thanks to the all-encompassing tokenization.
1.THERE WILL BE NO MORE SUCH THING AS TERRITORIAL LIMITS
To start, with the mass adoption of the new tokenized approach of raising capital, obtained by the innovative blockchain technology, there wouldn’t be territorial barriers for investing.
An investor from any region in the world, let’s say from Geneva, would be able to invest into a construction on the other corner of the world, let’s say in Singapore, without even leaving his homeland, with a high level of speed, liquidity, security, and efficiency of transfer given by blockchain system.
2.MORE AND MORE PEOPLE WILL BE ABLE TO AFFORD HIGHLY-VALUABLE ASSETS
The second way how the traditional investment would be changed forever by the mass tokenization is by creating a new category of Crypto-financial goods and changing the conventional concept of ownership.
If you think thoroughly, most of the assets that can be transferred to the blockchain, including real estate properties, company X stocks, precious metals, even fine art paintings.
The main idea is that the tokenization would allow more people to afford very expensive assets, which just a few can afford at the moment. This could be a trader, for instance, who want to diversify his/her portfolio of assets and be exposed at a less investment risk.
3.SAY “BYE” TO THE MINIMAL INVESTMENT
The third essential feature I would like to outline is the fact that, thanks to the tokens’ dividable nature, they promise much better liquidity which would double the expected value from trade and would overcome the need for minimum investments.
So why don’t we all forget about the “cookie jar approach” of earning money and play boldly?
Warren Buffett, a world-known business magnate, investor, speaker, and philanthropist as well as a CEO of Berkshire Hathaway, once said: “Beware the investment activity that produces applause; the great moves are usually greeted by yawns.”
So, would you like to be a pioneer or one of those who are left behind the tokenization crusade? It’s your choice.