Tokenized Financial Products

Definition ∞ Tokenized Financial Products are traditional financial instruments, such as stocks, bonds, or real estate, represented as digital tokens on a blockchain. These tokens grant ownership rights or claims to the underlying asset, enabling fractionalization and more efficient transfer. They leverage blockchain technology to enhance liquidity, transparency, and accessibility of conventional assets. This process can streamline various financial operations.
Context ∞ The emergence of tokenized financial products represents a significant development in the convergence of blockchain technology and capital markets. Institutions are exploring how to issue and manage these products to reduce costs and broaden investor access. Key discussions involve the legal classification of these tokens and their integration with existing regulatory frameworks. Future growth depends on establishing clear legal certainty and robust market infrastructure for these innovative asset classes.