Financial instrument tokenization is the process of representing traditional financial assets, such as stocks, bonds, or real estate, as digital tokens on a blockchain. This process converts ownership rights or economic value into a programmable, transferable digital format. It enables fractional ownership and increased liquidity for otherwise illiquid assets.
Context
This concept is a key driver for the convergence of traditional finance and blockchain technology. News often highlights partnerships between financial institutions and crypto platforms or regulatory developments concerning the legal status of tokenized securities. The future expansion of financial instrument tokenization promises to reshape capital markets by enhancing accessibility and operational efficiency.
Digitizing the Bill of Lading process via DLT shifts trade finance from a multi-day courier dependency to minute-scale settlement, significantly boosting working capital velocity.
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