Tokenized Cash Flows

Definition ∞ Tokenized cash flows involve representing future streams of income or revenue as digital tokens on a blockchain. This process transforms traditional financial assets, such as real estate rents or royalty payments, into divisible and tradable digital securities. Each token represents a claim on a portion of the underlying cash flow, allowing for fractional ownership and increased liquidity. This innovation democratizes access to asset classes traditionally reserved for institutional investors.
Context ∞ News reports often highlight tokenized cash flows as a significant application of blockchain technology in real-world asset (RWA) tokenization and decentralized finance. Discussions center on the legal frameworks, regulatory clarity, and technological standards required for widespread adoption. The potential for enhanced transparency and efficiency in capital markets is a key area of focus.