Structured Finance Digitization

Definition ∞ Structured finance digitization involves converting complex financial products, such as asset-backed securities, into digital tokens on a blockchain. This process can enhance transparency, reduce operational costs, and streamline trading and settlement. It applies blockchain technology to traditional financial instruments, creating more efficient markets. Such digitization offers new possibilities for liquidity and access.
Context ∞ Structured finance digitization is a growing area where blockchain technology intersects with traditional capital markets. A key discussion involves the legal frameworks and technological standards required to facilitate the compliant issuance and trading of tokenized structured products. Future developments will likely see greater adoption of this approach, potentially transforming how these instruments are managed and transacted.