Digital Asset Tokenization

Definition ∞ Digital Asset Tokenization is the process of representing ownership rights to an asset, whether tangible or intangible, as digital tokens on a blockchain. These tokens can then be bought, sold, and traded with greater ease and transparency. This method allows for the fractionalization of ownership, increasing liquidity for assets that were previously illiquid, such as real estate or fine art. It fundamentally alters how ownership and value are recorded and transferred in the digital realm. Context ∞ The current discourse on Digital Asset Tokenization is rapidly expanding, with a focus on tokenizing real-world assets (RWAs) like bonds, equities, and commodities. News frequently highlights projects aiming to bring traditional financial instruments onto blockchains, promising enhanced efficiency and broader market access. This trend signals a significant shift towards bridging traditional finance with decentralized technologies, creating new investment vehicles and potentially altering the structure of capital markets.