Tokenization of Assets

Definition ∞ Tokenization of Assets is the process of converting rights to an asset, whether real-world or digital, into a digital token on a blockchain. This token represents ownership or a share of the underlying asset, making it divisible, transferable, and verifiable on a distributed ledger. Assets such as real estate, commodities, art, or even intellectual property can be tokenized. This process enhances liquidity, reduces intermediaries, and enables fractional ownership.
Context ∞ The discussion surrounding Tokenization of Assets often centers on achieving regulatory clarity and developing robust legal frameworks for these digital representations. Key developments include financial institutions tokenizing traditional securities and real estate for improved market access. A significant future consideration involves the standardization of tokenization protocols and ensuring seamless interoperability across different blockchain networks. The potential for tokenization to revolutionize capital markets remains a prominent topic.