(Bloomberg) — Bitcoin’s record-breaking rally is rekindling hope that the digital-ledger technology that underpins cryptocurrencies will revolutionize everything from recording the ownership of houses to bonds.Most Read from Bloomberg Ho Chi Minh City Opens First Metro Line After Years of Delay Migrant Crisis Pushed US Homelessness to Record High in 2024 Tokenization, or the process of creating digital representations of real-world assets on a blockchain, has become one of this year’s buzzwords in both conventional and crypto finance circles. The excitement is reminiscent of the hype of a few years ago surrounding the use of blockchains for everything from tracking lettuce at Walmart Inc. to digitizing stocks that proved to be premature.For years now, tokenization of assets beyond stablecoins that serve as a proxy for actual currencies in crypto trading has flagged. Only some 67,530 parties — mainly institutions — hold tokenized assets that aren’t stablecoins, according to data tracker rwa.xyz. Just 0.003% of the total value of the world’s assets has been tokenized, and many companies behind the projects are on the brink of going out of business, researcher Opimas says.An unfavorable US regulatory regime was to blame in large part. For years, regulators encouraged banks to avoid crypto and related risks. While tokenized securities run on blockchains and adhere to the same rules as traditional securities, regulators often lumped them together with crypto as deserving heightened scrutiny. So many financial services providers chose to stay away, and instead invested in areas like AI.That’s starting to change, as President-elect Donald Trump plans for a more favorable regulatory regime for crypto, and with world’s biggest asset manager, BlackRock Inc., launching a tokenized money-market fund this year. That’s pushing others to follow.“Now they felt like they are able to do something and sped up their timeline a lot, whereas previously they were just watching,” said Charlie You, co-founder of rwa.xyz. “They are making things happen.”Gearing up for more traction, in October, card network Visa Inc. rolled out a platform that lets banks issue fiat-based tokens. In November, stablecoin issuer Tether launched a tokenization platform. The same month, Mastercard announced it’s connected its token network with JPMorgan Chase to settle cross-border business-to-business transactions on the bank’s Kinexys blockchain-based platform, and sees opportunity for introducing such payment schemes to more financial institutions.“That’s a clear trend that will continue to evolve and unlock a lot of new business models. That trend is here to stay,” said Raj Dhamodharan, executive vice president of blockchain and digital assets at Mastercard. Kinexys already supports about $2 billion in transactions per day, according to JPMorgan.A slew of money-market funds — many investing in US Treasuries — are planning to debut. Boston Consulti
Sab. Dic 28th, 2024
