Tokenisation, Pt 3

Emirex Group | Dec 12, 2019 1:59:05 PM

What can be tokenised?

Assets of almost every class can be tokenised today. Tangible, intangible and fungible assets can be tokenised, with full ownership transfer or limited rights transfer. Debt can be tokenised, too. Let’s have a look at some examples below:

 

Tangible assets: real estate is a good example of tangible assets. It is an illiquid asset class with a vast stock, that usually lacks transaction transparency. Its value exceeds two hundred trillion dollars, but these resources are just sitting there. The property market is pretty stagnant and transactions almost always involve intermediaries and a chunk of paperwork. Interestingly enough, it can be represented by both debt and equity tokens. Tokenising real estate, and thus selling it in smaller pieces is much easier than selling the whole property. This could make the real estate market much more liquid, efficient and transparent. Intermediaries and excessive paperwork would be removed, too. Tokenised property ownership, rental and usage rights, can be accessed and traded by anyone.

 

Equity:  another illiquid asset class, that can be tokenised. Both common and preferred conventional company shares could be issued, recorded and maintained on the blockchain. However, the preferred share tokens are specifically designed to have traditional features of preferred equity.

 

Intangible assets: trademarks, patents, carbon credits, copyrights, and so on care easily tokenised, since there are issues arising out of transfer duties, security etc.

 

Fungible assets: each unit of these assets can be replaced with any other identical unit (e.g., currency, gold, rice). These assets are very easily tokenised as it is rather simple to divide them into units.

 

Debt: an immense market that can be easily tokenised. Both private and public debt constitute enormous markets globally. Tokenised debt ensures regular dividend payments. Debt can be easily modeled as a futures vehicle, and tokenising it will become another mechanism of access to liquidity.

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