While crypto investment remains a niche among institutional investors, interest in asset tokenization gains vast momentum. Financial experts have been talking about the future of the global economy in the recent past, but the future is happening now! One of the significant benefits of digital assets is the power to reimagine the financial markets infrastructure.
The Benefits of a Tokenized Market Economy
Investors from all sectors of the economy are ready to exploit the benefits of asset tokenization. But why is the push toward these types of digital assets? Below are some of the primary benefits of a tokenized market economy representing a traditional asset, like real estate.
When you convert a traditional asset, like a property, bonds, equity, artwork, commodities, etc., buyers and other participants benefit from improved liquidity of tokenized assets on a blockchain network. Unlike the traditional market day setup, tokenization markets, like the Tokenizer DEX, are open for trading 24/7. This makes tokenized assets more liquid in terms of rapid transactions. Tokenization also opens up these assets by matching supply and demand in new ways never experienced before.
Fractional Ownership of Assets
The second benefit of a tokenized economy is the elimination of entry barriers to investment in higher-value assets. Minimum participation investments lock many investors out of a market. Investors who love to diversify their investment portfolio may want to limit any particular holding, and a minimum investment works against this principle. Besides, smaller traders have limited investment funds, but they are willing to participate and contribute to the world economy’s success.
In the above scenario, tokenized assets offer the same flexibility as tools, such as real estate investment trusts (REITs) and exchange-traded funds (ETFs). In other words, they abstract the asset into something that can be purchased in fractions.
Low Transactional Costs
For traditional assets, especially real estate, you will use hundreds of dollars to make any significant sale refinance and other transactions. The fees that accompany traditional asset transactions are so huge that they have spawned their own industry. Participants devote several hours and money to meet the comprehensive requirements of the transactions.
When you tokenize your assets on a blockchain, the complexity of transactions and intermediaries are eliminated from the equation. This frees up money that would otherwise be wasted in an average asset transaction.
Automatic Settlement Features
Apart from lowering transactional costs, asset tokenization also saves time for participants. Most traditional verification methods establish security benchmarks for fiat money investments. A blockchain asset strategy eliminates most of these requirements as well.
More robust Compliance and Regulatory Standards for Tokenized Assets
Regulators worldwide have often struggled with how to handle new asset classes. This applies to crypto, but a tokenized asset differs a lot from cryptocurrencies, like Bitcoin. It is a representation of some real-world assets that can be verified on the market. Asset-backed tokens resemble stablecoins more- tokens pegged to other assets like fiat money.
Asset tokenization offers regulators a forward-facing roadmap and better relationships with market participants who must report to these agencies. Generally, tokenization fosters trust and facilitates other partnerships that will ultimately bring the vibrant blockchain use cases to the world.
Tokenizer Blockchain Banking Platform
Tokenizer is a blockchain investment banking system that champions accessible, transparent, and safe financial services. We believe that everyone deserves equal access to investment and fundraising opportunities. That is why we are democratizing access to capital for investors and fundraisers by making investing and fundraising efficient, safe, and accessible to everyone.
Are you in need of raising funds or investing in security tokens? Apply to raise funds through Tokenizer by filling this application form. If you want to invest in security tokens, sign up for a Tokenizer Investment Account today, and if you want to liquidate and trade-in Asset-Backed Tokens, we have a decentralized exchange designed for you!
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