The benefits of tokenisation
Subscribe to our smart subscription to read this report in full
Tokenisation can increase the liquidity of shares, particularly for companies where secondary markets (i.e. after the securities have been issued) are limited or non-existent. The ability to easily exchange tokens can make these assets more attractive to investors.
An asset, regardless of its value, can be divided into several tokens representing fractions of that asset. This means that investors can buy or sell a small part
of the asset (for example 0.00001% of a share), making it accessible to a larger number of investors.
Assets previously reserved for institutional investors or wealthy individuals are becoming accessible to a wider audience. This is particularly the case with shares in unlisted companies. This aspect is limited for the moment due to the absence of specialised stock exchanges (or marketplaces).
The blockchain facilitates peer-to-peer transactions
, which reduces the number of intermediaries and thus cuts transaction costs and times.
Transparency and traceability_
Each transaction carried out on the blockchain is recorded immutably, guaranteeing full traceability of an asset's ownership.
The blockchains are secured by cryptographic mechanisms that reduce the risk of fraud or manipulation.
Tokenisation makes assets available in all four corners of the globe. This aspect is currently limited due to regulatory constraints and a lack of technological interoperability, but things are changing.
With the use of smart contracts on the blockchain, many processes, such as the distribution of dividends or the sale of a security, can be automated, reducing costs and errors.
Tokens can be programmed to ensure that transactions comply with local regulations, for example by restricting sales to accredited investors