Bridging the Gap! How integration of blockchain and tokenization can change the global scenario

It seems that the blockchain-based applications are expected to have an influence on the concept of tokenization as it can be beneficial for the long-term decentralized landscape. Experts believe that blockchain-backed asset tokenization could lead to a new definition of investments and ownership models, along with establishing a connection between business models and tokenized assets.

According to MarketsandMarkets, a market research company, the global tokenization market is expected to grow from $2.3 billion in 2021 to $5.6 billion by 2026, at a compound annual growth rate (CAGR) of 19%. “I believe tokenization has increased the usefulness of blockchain. Blockchain-based tokenization has the potential to offer security, less intermediaries, and greater automation along with transparency in transactions. Based on recent industry research, we can see a big push in the coming years where more sectors can take use this technology,” Prashant Kumar, founder and CEO, weTrade, a cryptocurrency-based platform, told FE Blockchain.

Insights from market-oriented research have shown that blockchain-based tokenization has the potential to secure proof of ownership and increase the liquidity potential of assets. As stated by Polymath (POLY), a blockchain-based token platform, blockchain’s utilization can provide increased efficiency and reduced errors in the creation, issuance and management of security, which also helps in cost reduction.

“Once an asset is tokenized, it can be traded 24×7 across the global market. This makes it easier to buy and sell assets, and also allows for price discovery. Blockchain-based tokenization can help reduce fraud and counterfeiting. When an asset is represented by a digital token on a blockchain, it becomes difficult to counterfeit or tamper with. This could have implications for sectors such as luxury goods and collectibles,” said Srinivas L, CEO and CTO, Rooba.Finance, a blockchain and smart contract-based platform .

Companies building asset tokenization-based solutions on blockchain are reported to include Securitize, Binance, tZERO, ADDX, SEBA Bank, Polymath, AllianceBlock, among others. The Dolder Grand Hotel in Switzerland is believed to have plans to tokenize its rooms and allow guests to partially own them through a security token offering (STO). Additional sectors such as finance, luxury goods, collectibles, voting rights, among others, are expected to move toward mainstream adoption of blockchain-based tokenization.

Moreover, market analysts predict that blockchain-based tokenization is here to stay, as the technology has the potential to benefit a variety of industries. As reported by HCLTech, an information technology company, tokenization faces challenges in terms of regulatory frameworks, as blockchain and tokenization integration could give rise to a new set of cryptocurrency assets.

“Since the sector is unregulated, there are pros and cons to it. There are cases where trust was broken such as FTT and FTX, and there are cases where pricing was affected. All this gives a negative feel, but if we look holistically, in the long term, it can reap many benefits if it can be bought under a global regulatory framework,” Vipin Vindal, CEO, Quarks Technosoft, an information technology (IT). ) solution company, highlighted.

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