Tokenization is technology that’s poised to transform capital markets and the way companies raise money through crowdfunding. It is simply a process whereby some form of asset is converted into tokens which can be moved, recorded or stored on a blockchain network. Blockchain allows the sharing of files and digital assets without generating duplicate copies, and for this reason, all transactions on the blockchain are secure and immutable. Blockchain works on a peer-to-peer basis where each transaction is recorded into a block without the need for any third party – which is why it’s the backbone on which cryptocurrency like Bitcoin or Ethereum is based.
But crypto is only one aspect of blockchain. Digital assets don’t always need to represent currencies. It can also represent stock, shares, real estate ownership, and really just about anything. Tokenization via blockchain makes the process of transacting ownership faster and much more efficient. The best part is that tokenization provides benefits never available to investors and issuers before, especially in the area of real estate. Instead of ownership being represented on a paper certificate, tokenization allows that ownership represented by tokens held in a digital wallet instead.
The whole key to the explosion of tokenization is the creation of a robust secondary market to create liquidity for these investments. Accredited investors still have the same requirements banks have to go through with “Know Your Client” (KYC) and “Anti-Money Laundering” (AML) onboarding, but the entire process is faster and more efficient than what most are experiencing today. And integrating with transfer agent custody makes a tokenization solution extremely attractive on all fronts.
For example, a real estate asset valued at $5 million can be tokenized into fractional pieces so the asset can now be traded on secondary markets created for this purpose such as the World Token Market. Along with greater liquidity, tokenization allows digital assets to be accessible to more investors all around the world. It is for this reason that tokenization (creating digital assets) is becoming very popular as a means to raise capital. And we’re seeing huge companies like Facebook already diving in.
To summarize: tokenization is the process of creating digital assets that can be freely traded on a secondary market while blockchain is the technology that allows it all to happen. Now it’s up to you to take the next step. Are you ready to reap the benefits of tokenization that so many others are currently doing? If so, contact the World Token Market to get started today by requesting a demo of the world’s most powerful, efficient, and compliant tokenization platform!