Tokenized Real Assets

Definition ∞ Tokenized real assets are physical or intangible real-world assets represented as digital tokens on a blockchain. This process involves converting ownership rights or economic interests in assets like real estate, art, commodities, or company shares into verifiable digital tokens. These tokens can then be traded, managed, and settled on a blockchain, offering enhanced liquidity and fractional ownership. Each token typically corresponds to a specific portion or claim on the underlying physical asset.
Context ∞ The tokenization of real assets is gaining considerable traction as a means to democratize access to investment opportunities and improve market efficiency. Discussions often revolve around the legal frameworks for ownership transfer, regulatory compliance for securities, and the challenges of accurately valuing and securing the underlying physical assets. A critical future development involves the establishment of clear legal precedents and robust technical standards for issuing and managing these digital representations. This innovation holds the potential to significantly broaden participation in diverse asset classes.