Tokenization

Main article: Blockchain

2023: What tokenization is and what its future is

Tokenization is able to change the structure of financial services and capital markets, allowing asset holders to take advantage of blockchain. This is stated in a study by McKinsey, the results of which were published on October 6, 2023.

Tokenization can be used to protect important or personal information, such as bank accounts, medical records, court or corporate documents.

Tokenization is able to change the structure of financial services and capital markets

Several types of tokens can be created during tokenization. One example is stablecoins - a type of cryptocurrency tied to real money. Another type of token is NFT, or non-interchangeable tokens, which is a digital proof of ownership of any assets. Each NFT instance is unique and cannot be replaced or replaced by another similar token.

Among the potential benefits of tokenization, McKinsey analysts cite:

• Faster transaction execution with 24/7 availability
• operating cost savings;
• democratize access by optimizing time-consuming manual processes;
• increased transparency due to smart contracts (computer algorithms designed to form, control and provide information about ownership of something).

Tokenization provides the ability to create decentralized platforms for asset trading without intermediaries.

As of the beginning of October 2023, about $120 billion of tokenized funds in the form of fully reserved stablecoins are in circulation. Analysts believe that by 2030, the volume of trading in tokenized digital securities will reach $5 trillion.^[1]

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