Definition ∞ Fund Fractionalization involves dividing ownership of an investment fund into smaller, more accessible units. This process allows a broader range of investors to acquire portions of assets that were previously restricted to larger capital commitments. It lowers the entry barrier for participation in various investment vehicles. Digital tokens often facilitate this division of ownership.
Context ∞ Fund fractionalization is a significant application of blockchain technology in asset management, particularly for illiquid assets like real estate or private equity. A key discussion revolves around the regulatory treatment of these fractionalized digital assets. Monitoring the legal and technological advancements enabling secure and compliant fractional ownership will be important.
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