Tokenization of Everything is a Matter of Time
At the 6th European Blockchain Convention’s session on tokenization, Monica Singer, South Africa Lead at ConsenSys, initiated the panel discussion by saying, “Anything that is not regulated is up for grabs with tokenization. That’s why the number of NFTs is skyrocketing. It’s collectibles, and we’re all collectors.”
Radoslav Albrecht, Founder and CEO of BitBond was a bit more cautious. “There’s going to be a moment when tokenized securities are going to overtake cryptocurrencies and other unregulated assets,” said Albrecht. “It’s going to take a while because banks and other regulated markets take longer to adopt. Bitbond sees bonds as being the first logical step when looking to expand tokenization in the real world and has focused its efforts on this arena.
“There’s going to be a moment when tokenized securities are going to overtake cryptocurrencies and other unregulated assets” – Radoslav Albrecht, Founder and CEO at BitBond.
For Jean-Marc, CEO of LiquidShare, regulation may be driving the tokenization movement. “It’s not a question of technology, it’s a question of the regulatory framework”. Tokenization of real-world assets, according to Eyssautier, is more likely than tokenization of financial instruments. “I’m skeptical that the market will be the biggest with traditional finance because the systems already work very efficiently.”
“It’s not a question of technology, it’s a question of the regulatory framework” – Jean-Marc Eyssautier, CEO of LiquidShare
Sustainability-driven tokenization is one of the more up-and-coming approaches, according to Sebastian Becker, Business Development Advisor at Riddle&Code. “We have some purpose-oriented initiatives, such as NFT projects, but also ESG projects. Together with Wien Energie in Austria we are tokenizing the largest photovoltaic power plant in the country and putting out kilowatt hour tokens to drive desired behavior.”
“Together with Wien Energie in Austria we are tokenizing the largest photovoltaic power plant of the country and putting out kilowatt hour tokens to drive desired behavior.” – Sebastian Becker, Business Development Advisor at Riddle&Code
Singer remained very optimistic about tokenization adoption. “There are so many benefits to tokenization. It’s a game-changer. It creates the idea of one currency for the world.” Singer emphasized the potential wealth-creating benefits for global impoverished communities, saying “The barriers to buying property in most countries are horrific. Imagine now you could own a fraction of a real estate asset. You could join this asset class by owning a portion of an asset through tokenization.”
“The barriers to buying property in most countries are horrific. Imagine now you could own a fraction of a real estate asset.” – Monica Singer, South Africa Lead at ConsenSys
Albrecht agreed, but is a bit more tempered. “It’s going to take us some time to get there. At some point, everything that has value will be tokenized. I think there are asset classes that will take 5 years, others 20.”
Albrecht also emphasized that traditional financial institutions may actually have a bigger barrier to entry than retail users due to switching costs. “For some more established institutions, the switching costs are much bigger. The benefits might not be as obvious to everybody because a lot of people might see the switching costs before they are able to capture and understand the benefits that tokenization brings.” Ultimately though, Albrecht believes that “the benefits will become more obvious over time.”
“For some more established institutions, the switching costs are much bigger. The benefits might not be as obvious to everybody because a lot of people might see the switching costs before they are able to capture and understand the benefits that tokenization brings.” – Radoslav Albrecht, Founder and CEO at BitBond.
The panelists agreed that the future of tokenization remains unclear, but retailers and institutions would benefit from focusing on the most stable iterations of tokenization that are available today. Becker concluded “Staking will become very important. We need to promote citizen participation in different arenas.” Albrecht added “We are going to see a lot more NFT-like tokenization. Not just art, certificates of genuity, certificates like driver’s licenses. There is likely to come a lot of demand for tokenization to prove ownership of things.”
“Staking will become very important. We need to promote citizen participation in different arenas.” – Sebastian Becker, Business Development Advisor at Riddle&Code
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