Institutional Tokenization 3.0: Break Silos
October 2024 Institutional Tokenization 3.0: Break Silos Since Tokeny started building tokenization solutions in 2017, we have seen financial institutions exploring tokenization of assets in…
- Cost reduction: Wiping out manual, expensive and time-consuming procedures, tokenization reduces the costs of management and corporate actions significantly thanks to automation through smart contracts.
- Increased liquidity: Automated compliance and easier transferability increase the liquidity of the assets, which is a crucial market feature during downturns.
- New revenue streams: Digital onboarding and fractionalization of assets allows institutions to reach a broader and global audience. In addition, institutions are able to monetize their services in DeFi at a low integration cost due to interoperability.
The institutional adoption is happening now
Tokenization is the future of finance. As history has shown, companies that fail to adopt innovative technologies risk being eliminated from the market. Thus, most institutions began to adopt tokenization. In the last 10 months, demand for our tokenization technology has doubled, mostly from major institutions, and several deals were signed with large entities.
It’s fair to conclude that even in this uncertain macro-financial environment and crypto winter, many mainstream institutions are already surfing the next wave to revolutionize finance and breaking from the decades-long status quo on how the financial world operates.
Institutions adopt asset tokenization with recession in sight
It seems like everywhere we look, prices are soaring. As fast as Covid-19 faded, the world faces yet another challenge with the Russian invasion of Ukraine, broad high inflation and a fast tightening monetary policy. The rising cost of living and of doing business is bolstering consumer and entrepreneur pessimism across the globe, raising the question of whether a global recession is coming our way.
TraFi is on the brink of a recession
In Europe, Credit Suisse’s stock dropped more than 50% this year so far, there’s a restructuring plan being designed and thousands may be fired. Some even compare it to Lehman Brothers’ collapse more than a decade ago. In Germany, Europe’s biggest economy, Deutsche Bank’s stock is also under immense pressure.
Crypto winter is far from over
Likewise, the DeFi world is also suffering from the adverse macroeconomic environment. The cryptocurrency sector lost $2 trillion since November last year, and the winter is far from over. Rather than taking a negative view of it, we see this as the necessary process for an industry to mature. As they say in the crypto world, it is time to “BUIDL”.
Tokenization is one of the sectors that is thriving
The time has come to reshape existing businesses to bring about radical change. Tokenization is the innovation financial institutions need to stay relevant and competitive. There are three main needs as catalysts for institutional tokenization adoption: