A huge number of opportunities_.
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In contrast to listed groups, small and medium-sized companies often find it difficult to attract investors, with the possible exception of certain start-ups. By issuing a token that represents a share, any company can raise money on the tokenised markets, providing a new source of financing and making it easier for investors to sell their shares if they wish. This system has the added advantage of being more flexible and less costly than a traditional IPO.
Bonds can be tokenised to simplify the process of issuing, selling and managing interest payments (see the interview with Jean-Marc Stenger, CEO of SG-Forge). This can also be useful when the projects to be financed are too small to attract the investment arms of banks (CIBs).
Assets linked to ESG criteria_
Tokenisation can be used to structure and standardise data in tokens and track them. This can be relevant for complex projects that need to integrate a lot of data, such as those related to environmental, social and governance (ESG) criteria. From this point of view, the tokenisation of green bonds offers some interesting prospects.
On paper, all financial assets can be tokenised, but is it really useful? Not necessarily. At least in the short term. We therefore need to ask ourselves what needs and problems tokenisation solves in terms of accessibility, cost and speed.
There are already many tokenised fiat currencies, known as "stablecoins". These stablecoins are linked to the value of a real currency, such as the US dollar or the euro. This offers a significant operational gain in cross-border financial flows between financial institutions.
Commodities, fund shares, etc_
Generally speaking, tokenisation lowers the entry ticket and improves asset distribution.
Insurance contracts can be represented in the form of tokens to facilitate underwriting, management and payments. With smart contracts, compensation can be automatically triggered and paid according to predefined conditions (damage, delays, etc.). A travel insurance policy could automatically compensate a customer if their flight is cancelled or delayed, without the customer needing to file a claim.
Thanks to tokenisation, a property can theoretically be divided into many small "pieces" or tokens.
This system makes it possible to have shared or fractional ownership. This makes the property market accessible to more investors who might not be able to afford to buy a whole property.