Financial sector: 5 Asset towards tokenization

The most important events, recorded in the last 6-8 months in the field of blockchain technology and financial services, include the securitization of illiquid assets such as Venture Capitalist (VC) funds, real estate, art and, even, the tokenization of sports teams.

Indeed, asset valuations will be revised thanks to the introduction of blockchain technology in the sector as a whole.

Although the driving force behind this change is cryptocurrencies and the Blockchain, there has been an evolution in a more organized, regulated and transparent market for both institutional and retail investors.

From innovators and early adopters, the market has become mainstream, with financial institutions like JPMorgan e Fidelity Investments who entered this new market.

Why now after 11 years?

Although blockchain and Bitcoin were launched on the market a decade ago, we are only now witnessing the mass adoption of the decentralization for three factors:

• the Bitcoin boom in late 2017 brought a wider audience to the blockchain and cryptocurrency market,
• the transition of financial markets towards greater open-source, transparent and financial inclusiveness,
• institutions have understood that cryptocurrency and the underlying technology associated with it in the blockchain are convenient for securitizing assets.

What assets are tradable?

VC funds

Traditionally very illiquid, the increase in equity token liquidity would allow multiple participants to invest in the asset class. A larger pool of investors is an advantage for venture capitalists.

Precious metals (gold, silver, etc.)

La tokenization of precious metals like gold, silver or diamonds involves a greater transparency of this illiquid market, reserved for the rich.

Real Estate

La real estate tokenization allows investors to purchase owned fractions and earn capital and dividends similar to traditional investments. The tokenization ecosystem decreases le barriers to entry, the transaction costsa easier access to a wider pool of investment opportunities worldwide.

Art and luxury goods

THE is a very conservative sector and is traditionally managed by auction houses and galleries that invest in a segment limited to a few people with a high net worth (HNI). Conventionally, highly valuable and illiquid goods attract investments towards art and luxury goods.

Stablecoins

- stablecoins they are a fundamental part of the crypto-ecosystem. There is a growing interest in stablecoins and expectations of a growing increase over the next 12-18 months will ensure one reduction of transaction costs and processing times, while reducing the volatility of the crypto-market.