Private Asset Liquidity

Definition ∞ Private asset liquidity refers to the ease with which illiquid assets, such as real estate, private equity, or collectibles, can be converted into cash or other liquid instruments. Tokenization on a blockchain significantly enhances this liquidity by fractionalizing ownership and enabling secondary markets for these traditionally hard-to-trade assets. This process expands investment access and improves capital efficiency. It reduces the barriers to trading non-publicly listed holdings.
Context ∞ News frequently reports on platforms and initiatives aimed at improving private asset liquidity through tokenization, attracting attention from both institutional and retail investors. Discussions often involve the regulatory challenges of creating compliant secondary markets for tokenized private assets. The ability to unlock value from previously illiquid holdings is a major driver of innovation in the digital asset space.