Fixed Income Tokenization

Definition ∞ Fixed income tokenization is the process of representing traditional fixed income securities, such as bonds, as digital tokens on a blockchain. This transformation allows for fractional ownership, automated coupon payments, and streamlined secondary market trading. It converts illiquid assets into more divisible and transferable digital forms. This method can potentially broaden investor access and improve market efficiency.
Context ∞ The potential of fixed income tokenization to enhance liquidity and reduce administrative overhead is a key area of interest for institutional investors and financial innovators. Regulatory bodies are evaluating how these tokenized instruments fit within existing securities laws and market infrastructures. This development suggests a future with more accessible and efficient debt markets.