2023 Theme: Tokenization
2023 is shaping up to be a big year for asset tokenization. As the world continues to move toward a digital economy, more and more assets are being tokenized on the blockchain. This allows for the creation of digital versions of assets such as real estate, commodities like gold and silver, and fixed income assets. KKR, a global investment firm, recently tokenized one of their bonds and put the tokens on the public Avalanche blockchain, all while incorporating KYC/AML into their process. In addition, Goldman Sachs announced the banks new Digital Asset Platform which is build using Daml smart contracts and on the Canton Blockchain. The platform reduces the typical bond issuance settlement time for the European Investment Bank from T+5 to T+0 at a speed of sub-60 seconds with cross-chain atomic Delivery versus Payment (DvP) settlement.
One of the biggest advantages of tokenizing assets is the increased liquidity it provides and the inherent characteristics that can be encoded into the assets to automate the business process flow. By turning an illiquid asset into a digital token, it becomes much easier to buy and sell on a global market. Another advantage of tokenization is the increased transparency it provides. By storing information about the asset on the blockchain, it becomes much more difficult for fraud to occur. This can increase investor confidence and lead to more investment in the asset.
At Rethink Ledgers, we have been helping clients tokenize their assets for the past several years. We have experience in a wide range of industries, specifically Financial Services and can help clients navigate the complex technical aspects of tokenization. One area we expect to see significant growth in 2023 is the tokenization of fixed income securities such as Bonds.
We are excited about the opportunities that asset tokenization presents in 2023 and beyond. If you’re interested in learning more about how your company can benefit from tokenization, we would be happy to speak with you.