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Ways of Attracting Investment: Asset Tokenization vs Traditional Financial Instruments

Amidst the overwhelming buzz around tokenization, it’s hard to grasp why the transfer of real and virtual assets to a blockchain is considered nothing short of a revolution in the financial world. In this article, we will look into the essence of tokenization and compare it to conventional financial instruments such as IPO, venture funds, angel investors, and bank loans.

What is the tokenization of assets?

Tokenization is a process of transferring the ownership of tangible or intangible assets to tokens on the blockchain. Tokenization can be applied to a variety of assets: fiat currencies, stocks, shares, real estate, oil barrels, gold bars, and even copyrights to images, music, or texts, to name just a few.

The process of tokenization is relatively simple. All you need to do is issue tokens on the blockchain and assign them appropriate rights. While the first stage doesn’t present any challenges thanks to Ethereum or BSC platforms, some issues may arise during licensing of tokens owing to a lack of clear-cut regulatory norms for this market segment. It still gravely hampers the mainstream implementation of tokenization into the world economy. We understand this to be a temporary impediment, which will almost certainly be removed as soon as the EU, the US, and other countries pass resolutions in this regard.

Read the full article at BeInCrypto >>

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