November 13, 2023

Digitization of Real-World Assets via Tokenisation

In recent years, the world of finance and investment has witnessed a profound development in the emergence of tokenization in the digital landscape. As per a study conducted by the Boston Consulting Group (BCG), the tokenization of alternative assets is anticipated to revolutionize investment accessibility, potentially evolving into a substantial $16 trillion industry by the year 2030.
Digitization of Real-World Assets via Tokenisation

In recent years, the world of finance and investment has witnessed a profound development in the emergence of tokenization in the digital landscape. As per a study conducted by the Boston Consulting Group (BCG), the tokenization of alternative assets is anticipated to revolutionize investment accessibility, potentially evolving into a substantial $16 trillion industry by the year 2030.

What is Tokenisation?

Tokenization is the process of converting ownership rights to an asset, whether physical or digital, into a digital token on a blockchain. One of the most exciting developments in this space is the tokenization of real-world assets (RWAs).

Understanding Real-World Asset Tokenization

The fundamental concept of RWAs tokenization is the process of converting physical assets, such as real estate, art, stocks, gold, cars, and more, into digital tokens on a blockchain. To make it simple, RWAs tokenization creates a digital investment mechanism on the blockchain, representing tangible assets rather than relying on physical documents like property deeds, ownership is recorded on the blockchain. This ownership can be directly exchanged between parties, or it can be divided into fractions and made available for purchases by multiple individuals.  

Rakkar Digital just announced their partnership with OpenEden, which will now give Rakkar Digital’s institutional investors access to tokenised U.S. Treasuries while safeguarding their assets within a bank-grade custodian platform.

Types of Real-World Assets that can be Tokenized into Real-World Assets

Real Estate

Properties can be tokenized into real-world assets, allowing for fractional ownership and facilitating investment in real estate assets

Guarantees

Guarantees can be tokenized, making it easier to manage and transfer financial commitments

Contracts

Legal contracts can be represented as tokens, streamlining contractual agreements and their execution

Invoices

Invoices can be tokenized, allowing for efficient management and financing of pending payments

Fine art

High-value art pieces can be tokenized, opening investment opportunities in the art world  

Loans

Loan agreements can be tokenized, transforming the way borrowing and lending are conducted

Royalties

Intellectual property rights, such as royalties from music or patents, can be tokenized to facilitate the distribution of earnings

Commodities  

Physical assets like gold, oil, or agricultural products can be tokenized, simplifying trading and ownership

The Significance of Real-World Assets in the Digital Assets Ecosystem

RWAs play a pivotal role in the world of digital assetsas they bridge the digital realm of blockchain technology with the physical assets of the real world. Over $800 trillion USD in traditional markets is poised to be disrupted by blockchain through the tokenization of real-world assets.  

This digital transformation brought about by RWA tokenization offers numerous benefits, including increased liquidity, transparency, and accessibility. This innovation is poised to reshape the landscape of ownership and investment, making valuable assets more accessible and tradable while maintaining the security and integrity of ownership records. It also lowers costs by removing middlemen and the expenses associated with asset management, allowing for fast and efficient 24/7 trading of items that traditionally could only be done during "working hours."


In conclusion, the tokenization of RWAs represents a significant and transformative shift in the landscape of finance and investment. It is a groundbreaking transformation, where ownership and investment become more accessible, tradable, and secure.  

Rakkar Digital, Asia’s leading qualified digital asset custodian, understands the profound impact and the growing trend of real-world asset tokenization. We recognize the importance of secure custodianship and efficient management of digital assets and providing a reliable solution for institutional investors.

About Rakkar

Rakkar stands as Asia's leading qualified digital asset custodian, offering unparalleled asset security to financial institutions. Fortified by our strategic backing from SCB 10X, the investment arm of the Siam Commercial Bank, Rakkar Digital helms the industry’s leading bank-calibre security measures and compliance frameworks. Founded in 2022 and belting esteemed security excellence certifications such as ISO 27001 and SOC 2 Type 1 and Type 2, Rakkar Digital remains unwavering in its mission to offer the most secure, institutional-grade custodian services across Asia.

Disclaimer: Digital assets involve risks; investors should complete independent due diligence and research to carefully make investments according to their own risk profile.
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Date
May 27, 2024
Category
Institutions
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