Document Tokenization

Definition ∞ Document tokenization is the process of converting legal or financial documents into digital tokens on a blockchain. Each token represents a verifiable, immutable record of the document’s existence, ownership, or specific clauses. This method can enhance transparency, reduce fraud, and streamline administrative processes by providing a secure, auditable digital representation. It allows for fractional ownership or automated execution of document-related agreements through smart contracts.
Context ∞ Document tokenization is gaining attention in legal and financial technology news, particularly for its potential to modernize asset management and contract execution. Discussions often highlight applications in real estate, intellectual property, and supply chain finance. Regulatory clarity regarding the legal standing of tokenized documents remains a key area of development. Future progress will likely involve standardized protocols for tokenizing various document types and increased adoption in regulated industries.