Why Should We Tokenize Assets?
16 Sep 2020 — In this week’s series of “Setting the Record Straight”, we will be looking at asset #tokenization.
In general, asset tokenization is a way that converts rights to an asset into a digital token. From securities, commodities and currencies to buildings, sports, and arts, almost everything can be tokenized.
So, why should we tokenize assets? Firstly, it removes geographical barriers and enhances liquidity for an asset exchange business. The fragmentation of assets and ownerships allows small time investors to invest.
What’s more, through its blockchain technology, every transaction that is recorded is transparent and cannot be altered / erased, hence no chances of fraudulent.
Since transactions of tokens are performed using smart contracts, which are immutable, tokenization reduces the number of intermediaries required in a transaction and thereby making it faster and more cost-effective.
To reinforce your understanding on asset tokenization, check out INX Limited – the Gibraltar-based security token exchange’s series of videos that explain tokenization and security tokens in simple and easy-to-understand manner.