Tokenized Finance

Definition ∞ Tokenized finance involves representing real-world assets or traditional financial instruments as digital tokens on a blockchain. This process converts ownership rights or economic value into programmable, transferable digital units. Examples include tokenized securities, real estate, or commodities, which can then be traded and managed on distributed ledger technology. It offers potential for increased liquidity, fractional ownership, and automated settlement.
Context ∞ News frequently covers the expansion of tokenized finance, highlighting initiatives by financial institutions and blockchain platforms to bring traditional assets onto distributed ledgers. Discussions often center on the regulatory hurdles and technological advancements required for widespread adoption. The potential for greater efficiency and accessibility in capital markets remains a key focus.