Tokenisation, Pt 1

Emirex Group | Dec 12, 2019 1:51:19 PM

What is asset tokenisation?

 

Tokenisation is the process of transferring asset rights to a digital token on the blockchain in order to use the capabilities of the technology while preserving the characteristics of the asset. An asset is first put on a blockchain and then offered as a whole or broken into smaller chunks that can be distributed between a number of people in a swift, crypto-secure, and traceable way. Let’s take a closer look at how blockchain tokens may represent various assets, examine the benefits of tokenisation, the legal aspects and more.

 

Property titles, stocks, ownership of commodities, etc are registered as documents, within the framework of law of every jurisdiction. Blockchain tokens are capable of doing the same job, in a more efficient way, - and it helps to save the trees, too. The concept is quite new, however, according to the research of the World Economic Forum in seven years from now, 1/10 of the global GDP will be moved to the blockchain.

Traditional commodity exchanges trade electronic documents that represent assets, such as stocks, property, petrochemicals, agricultural goods, gold, and so on. Although technology has been involved in the trading process for a while, the method involves complicated follow-up and tracking systems, together with complex legal paperwork and increased costs. The method also heavily depends on the confidence and performance of individual parties in the process, whereas access to the assets and the trading is quite restricted. Another issue that arises when trading parts of assets, as some are hard or impossible to break into pieces.

 

Asset tokenisation provides a solution that allows minimized costs, decreased risk of forged documents together with better tracking and faster process. Thus, it is safe to say that tokenisation revolutionizes the way assets are registered, traded and accessed. The new technology makes real-world assets as accessible, safe and fast as cryptos, while their value is preserved.

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