Tokenisation of Global Assets
The first paradigm shift in modern trading came with the internet. Then came cryptocurrencies. Allowing faster and cheaper transactions, more transparency and more accessibility, the arrival of tokenisation is about to change the way we invest in assets. Similar to any major disruption, tokenisation shapes the financial landscape, creating potential changes in the dynamics of multi-asset investing. While money makes the world go round today, in the world of tomorrow, that task will be handled by tokens.
The Token of Trust
There is currently a fundamental shift from federated models to decentralised ecosystems with the aim to allow people to control their identity and data. Over-collection of personal data has caused a decline in trust in governments and other corporations. Meeco, the infrastructure for trusted personal data ecosystems, has chosen Hedara Hashgraph as its underlying public distributed ledger to build a unified wallet offering. To marry today’s world of data, finance, and privacy to the world of tomorrow is the company’s vision. Its approach to launch a multi-purpose wallet focuses on enabling more equitable value creation for people and organisations engaging in environments surrounded by digital identity and trust. By also collaborating with the aforementioned distributed ledger company, EFTPOS Payments Australia is testing the feasibility of a digital Australian dollar stablecoin for micropayments. Led by Robert Allen, EFTPOS entrepreneur, the network leverages next generation payments infrastructure technology while opening up ways of conducting business online.
Real Estate Is Ready for Tokenisation
Due to its relative novelty, the tokenised property remains niche. Yet, a report from London-born advisory and accountancy network, Moore Global has noted that "Even if just 0.5% of the total global property market were to be tokenised in the next 5 years, it would be on track to become a $1.4 trillion market”. The use of smart contracts has enabled real estate investment to become more accessible to younger investors. Tokenising the real estate industry allows fractional ownership which is another major draw. Fractionalising property leads to more inclusivity and availability to a wider investor base, eliminating the high barrier to entry and allowing more access to capital. Institutional investors’ hesitancy and the absence of established secondary markets for security token trading has led to the expansion of real estate tokenisation falling short of expectations. However, this could change with the grant of an operational license to digital security exchange issued by the United Kingdom’s Financial Conduct Authority.
The Next Massive Crypto Trend
Cryptocurrency has seen the biggest craze after NFTs being social tokens. For those making a living from delivering their creative side over the internet, social tokens offer the opportunity to re-align the interests of creators and their communities. The crypto world is offering new tools, taking advantage of Ethereum’s well-known composability. Unite Community provides access to airdrop tokens on Twitter while Llama facilitates the task of managing a community treasury. Collab land, a widely used tool among other tools on the radar, provides new ways of gating content, minting, and distributing tokens. Rally – a platform based on Ethereum- allows fluid interaction of different social media influencers and their fans. There are currently 10 million social tokens in circulation with a fully diluted valuation of $330million. These social tokens are decentralised, and they have integrated a sense of community which is a big factor in the growing adoption and popularity of bitcoin.
The Securities of Tomorrow
Tokenisation and digitisation allow to make a leap into the future with programmable money. After considering the balance between utility, ethics and privacy, tokenised money can help to improve the fight against money laundering and the financing of terrorism. The biggest revolution is to fully orient an investment to its values and objectives. The increasing focus on decarbonisation makes it sensible to use tokenised digital assets in sustainability-related markets. Carbon credits and other linked assets could be used to offset environmental footprints. "The tokenisation of traditional assets into digital assets has the potential to completely revolutionise how we exchange value", according to Hamel from Solaris Bank. Now it's a question of waiting for the maturity curve and continuing to build knowledge and skills, both internally and alongside the external ecosystem.