Here at US MRKT, we have been analyzing the use of tokenization and its applicability to various assets for many months now. As a reminder, “tokens” or “tokenization” is the process of converting the rights to assets with economic value into a digital token, stored and managed on a blockchain network such as Ethereum. The process of “tokenizing” an asset requires compliance with securities laws in the jurisdiction where the buyer and seller are located.
A significant area of interest related to tokens is the possibility of efficiently (and with cost controls) fractionalizing the sale of assets (including real estate) which creates greater accessibility to high value assets, and increased liquidity. Elizabeth White, CEO of The White Company, a blockchain payment company said recently, “Assets such as real estate have traditionally imposed high minimums. The reason has always been simply that it’s impractical to deal with hundreds, let alone thousands, of investors, keeping track of their investment value, income payments, transfers of ownership and more. But tokenized assets can be administered entirely on the blockchain, and funding of the investment, transfers and redemptions can be done automatically.”
There is no doubt that in the near future the tokenization process will be streamlined, and the costs associated with the process will decrease. Here at US MRKT, we are already seeing cost reductions as more engineers, lawyers, and business promoters enter the space.
Watch this space for more updates on blockchain and tokens.