05 Nov 2019 Pavel Petrov
Asian Financial Leaders Publish A Roadmap For Tokenized Securities
A new collaborative group, with representatives from Asia's largest financial service providers and asset managers, published their roadmap regarding the future of tokenized securities. The document describes the tokenization of traditional assets, such as stocks or bonds, by putting them in a specialized digital wrapper. The paper also highlights the need for regulatory clarity on tokenized securities in order for them to have a future.
The tokenization procedure involves the use of blockchain. The use of blockchain technology "could become a powerful tool in the arsenal of every financial service managers and asset management companies, with full regulatory compliance”, the Asia Securities Industry and Financial Markets Association report states.
The group consists of representatives from Asia's most significant financial companies – international giants like PriceWaterhouseCoopers, Citigroup Inc., Standard Chartered, and Nomura Holdings.
In the roadmap, the group states that mixing together the worlds of traditional financing and blockchain technology would be beneficial for everyone, as the stakeholders will receive the stability and reliability of a regulated asset with the added ease of use and efficiency of the blockchain ecosystem. The merge would also boost trust in the crypto sector and lower its volatility.
"The tokenization process could provide companies with an innovative, fast, and transparent financing model. It can also improve efficiency and liquidity ", the report adds.
The report also takes into consideration the almost immediate settlements, automated law compliance, and trading "around the clock."
The idea of tokenized securities isn't new, but its mass adoption has been halted numerous times due to regulators not being ready for the new type of assets.
The crypto sector, however, steps aside from its primary use as a cryptocurrency. Institutional investors want further clarification about token creation, initial token offerings, exchanging, and governance. Their needs would help the faster adoption of the tokenization process. "In any case, however, further legal reform is mandatory," the document concludes.Financial service finances Security Token Offering Financial Service Agency Securitization Security Securities Financial institution