Securities have long ceased to be securities. Stocks, futures contracts, contracts for difference, options and bonds - all financial assets are bought and sold on exchanges electronically.
But cryptocurrency technologies take the world of investing to a new level of development.
Let us explain why tokenized assets appeared. What is it and how are they arranged.
What is a tokenized asset?
Bitcoin became the first digital currency. But today, cryptocurrencies are far from the only example of using blockchain technologies in financial markets. Crypto assets such as tokenized shares of companies, as well as other tokenized financial instruments, are becoming increasingly widespread.
What is the point?
To get a tokenized asset, you need to have a basic asset. For example, a company stock. Blockchain technology transforms it into a security token. This results in a tokenized stock. A computer algorithm (smart contract) controls the conduct of transactions with tokens and ensures reliability in operations.
Features of the tokenized stock:
Thus, it is possible to “digitize” not only the company's shares but also other financial papers - oil contracts, stock indices, food, precious metals. By the way, operations with tokenized real estate are already underway in the world.
From the point of view of financial legislation, security tokens are documents that regulate the circulation of securities. Companies issuing such tokens must have the appropriate licenses. And investors who attract capital to their projects using security token offers are required to meet the requirements of official financial regulators, including the SEC (Securities and Exchange Commission)
What are the benefits of tokenized assets?
To all the advantages of classic financial instruments, the security token adds the benefits of digital technology. More specifically:
In addition, thanks to the blockchain, the need for intermediary infrastructure is eliminated - banks, depositories, clearing companies. Two more advantages follow from this:
In practice, you can buy a tokenized financial asset for both fiat money and cryptocurrencies. But it is most advisable to use bitcoins or USDT to preserve all the advantages of blockchain technology.
Where can I buy?
The number of cryptocurrency exchanges in the world is already in the hundreds, but the practice of trading tokenized assets is only being introduced.
Coin Market Solution registered in Estonia is a unique platform where you can trade both cryptocurrencies and various tokenized assets - stocks, gold, oil, food, stock indices.