asset tokenization advisory

How is Asset Tokenization Redefining the Financial Industry

Tokenization of assets is poised to disrupt various industries, in particular the financial industry. It will redefine the way people invest in assets – from art to buildings. Those who are not prepared for asset tokenization are more likely to lag behind.

What is asset tokenization?

Asset tokenization refers to the process of issuing blockchain tokens, specifically security tokens. These tokens digitally typify a real-world tradable asset and are issued through Security Token Offerings (STOs). A security token represents a share in a company or ownership of a piece of property. The security tokens are then traded on the secondary market.

With the increase in the popularity of asset tokenization, the demand for asset tokenization advisory services is also increasing. Businesses are leveraging the experience and expertise of asset tokenization professionals to reap the benefits of a new token economy.

How is asset tokenization reshaping the finance industry?

Asset tokenization forges the path for a more efficient and transparent financial world by mitigating the friction present in the process of creating, buying, and selling securities. The following are the ways by which asset tokenization is bringing a shift in the financial industry.

  • Greater Liquidity

The issuers of tokens harness asset tokenization consultancy and development services to tokenize their assets – especially private securities and illiquid assets like fine arts – and easily trade their tokens on a secondary market. Access to a large number of traders improves the liquidity of assets, enabling both issuers and investors to capture greater value from the underlying asset.

  • Quick and Cost-efficient Transactions

The transactions of tokens are driven by smart contracts, which are software programs written to trigger actions when certain conditions are met. The smart contracts automate transactions, reducing the administrative burden involved in the process of token buying and selling, with the need for fewer intermediaries. This results in quick transactions and lower transaction fees.

  • Greater Transparency

Security tokens are embedded with token holders’ rights and legal responsibilities, along with an immutable record of ownership. This results in transparent transactions and provides a clear picture of token holders’ rights and who previously owned a particular token.

  • More Accessibility

Tokens are highly divisible, which means that investors can buy tokens that represent significantly small percentage of an underlying asset. This enables the investors to enter the market, even with small investment amounts.

Take away

Tokenization has the potential to make the financial industry more accessible, accelerated, cost-efficient, and simplified, thereby unlocking trillions of funds in currently illiquid assets and elevating the volumes of trade.

At Millennial Partners, we offer asset tokenization consultancy and development services to help businesses embark on their journey to tokenize their assets. Whether you want to tokenize real estate, art piece, commodity, or any other asset, we help you accomplish your goals with our mission-driven solutions.

Millennial Partners (millennial.ae) prides itself on serving clients’ most pressing organization transformational needs across people, processes, and technology through its own proprietary frameworks. Our digital transformation offering is most relevant to the increasingly digital enterprise and consumer environments. We follow a coherent roadmap that includes incorporating the most cutting-edge technologies and vendors focusing on technologies such as enterprise Blockchain, Artificial Intelligence, and IoT.

Should you have any questions and or would like some focused professional advice, please don’t hesitate to reach out on our e-mail at info@millennial.ae.