Tokenized receivables are future payment obligations, such as invoices or contractual payments, that have been converted into digital tokens on a blockchain. This process transforms illiquid future cash flows into transferable digital assets, which can then be sold, traded, or used as collateral. Tokenization provides increased liquidity and transparency for these financial instruments, potentially reducing financing costs and accelerating settlement times. It allows for fractional ownership and broader participation in markets for future revenue streams.
Context
The tokenization of receivables is a developing area within decentralized finance, offering new avenues for working capital financing and supply chain liquidity. Discussions often address the legal enforceability of these tokenized claims, the credit risk associated with the underlying debtors, and the standardization of token formats. Regulatory bodies are evaluating how to integrate these novel financial instruments into existing legal and financial frameworks, ensuring investor protection and market integrity.
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