After False Starts, Will Tokenisation be the Next Big Thing in 2024?

Tokenisation is the process of breaking down a text into smaller units called tokens and is increasingly being viewed as a palatable option for governments and regulatory bodies alike, with world governments exploring the benefits of blockchain technology, such as enhanced liquidity, fractional ownership and global accessibility, without full exposure to the volatility of cryptocurrencies.

For the first time, governments around the world find themselves required to make changes to their respective regulations, if they wish to leverage blockchain technology that will stand to benefit them in the future.

There’s a widespread belief that the tokenisation market has enormous potential, with a report by Boston Consulting Group predicted that by 2030, the tokenisation of assets in general is going to be a multi-trillion dollar market. . The current use cases are seen as only a fraction of what could be achieved in the near future.

While, the author of the Forbes article argues that the main obstacle to tokenisation adoption is trust, while the opposing viewpoint presented suggests that technical bottlenecks and infrastructure limitations are the primary challenges.

Despite challenges, there has been significant progress over the last year in addressing technical issues and improving infrastructure and interoperability.

Major financial institutions, including private equity funds and traditional giants like Hamilton Lane and JP Morgan, are showing interest in and actively developing tokenised funds. This is seen as a sign of growing acceptance and integration of tokenisation in traditional finance (TradFi).

The next wave of tokenisation is expected to include a broader range of assets, such as bonds, equities, art, automobiles, commodities, fine wines, and real estate. Tokenization is expected to simplify traditionally complex and slow-moving markets, making them more accessible and liquid.

The adoption of tokenisation is expected to attract new generations of investors, bringing new life into traditional markets. This shift may also lead to the development of new payment rails and the establishment of industry-wide standards to ensure interoperability.

Real-world assets are predicted to be a key driver of digital asset adoption. Over the last year, several established financial powerhouses have embraced the notion of tokenising real-world assets, incorporating ownership of valuable assets such as precious metals, art and real estate onto the blockchain.

In summary, the text discusses the potential for substantial growth in the tokenisation market, the challenges faced, recent progress, and the expected entry of major financial players, which could drive the next phase of development in the space.

(Source: CoinDesk)

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