How to Tokenize a Business Asset?
Tokenization is a widely discussed topic. You have probably heard about crypto being the future, industries getting ‘disrupted,’ buzz words to do with tokenization. The list goes on. But what is tokenization, and how can businesses use its benefits? Let’s go deep into this concept.
Tokenization is the conversion of tangible and intangible assets into tokens on a blockchain. Digitized assets become highly divisible so investors can invest in small percentages of tokenized assets. It means the entry barriers for billions of investors are removed. Since all transactions are done with smart contracts, the exchange and trading process is automated without the involvement of various intermediaries.
What Business Valuables Can Be Tokenized?
Why do businesses need tokenization? In comparison with traditional investment instruments like IPO or venture capital, tokenization is believed to be the best way for small and medium businesses to attract investment in the early stage of their development. The process is manageable and does not require a huge amount of time and investments.
Businesses can convert any of their valuables – services, funds, equity, and assets on the balance sheet, into tokens. By distributing the tokens among all the private investors willing to hold the tokens, businesses can accumulate the needed investments and streamline them for further development.
To find out how to estimate business valuables, read our free tokenization guideline
How to Convert Assets Into Tokens?
There are various tokenization platforms, where businesses can tokenize assets and issue tokens. Depending on the tech solution, jurisdiction, or compliance with the regulators, the tokenization process requires using several platforms.
Generally, there are five main steps of the tokenization process at the Binaryx platform:
- Sending request regarding tokenization.
- Business audit.
- Token issuance.
- Attracting investors.
- Token listing on the exchange.
Tokenization opens new opportunities for businesses and provides flexibility for financial decisions. Among other benefits, it lowers costs and provides businesses access to liquidity.
To get an in-depth vision of the necessary steps, read our free tokenization guideline.