Bond Tokenization

Definition ∞ Bond tokenization involves converting traditional financial bonds into digital tokens on a blockchain network. This process represents ownership or fractional ownership of a bond as a cryptographic asset. It aims to improve liquidity, reduce transaction costs, and broaden access to bond markets. Tokenized bonds can offer enhanced transparency and programmability through smart contracts.
Context ∞ The discussion surrounding bond tokenization often centers on its potential to revolutionize debt markets by increasing efficiency and reducing intermediaries. Key considerations include regulatory frameworks for digital securities, interoperability between different blockchain platforms, and the legal recognition of tokenized ownership. Future developments will likely focus on institutional adoption, the creation of secondary markets for these digital assets, and overcoming current legal ambiguities.