Major Banks Begin Tokenizing Real-World Assets, says Niki Ariyasinghe

George Town, Cayman Islands, Monday, February 26, 2024 – Leading banks have already started tokenizing real-world assets (RWAs), Niki Ariyasinghe, Head of Business Development for Asia-Pacific and the Middle East at Chainlink Labs, said at a recent event: ¹

This marks a significant shift from theoretical exploration to full-scale adoption, potentially unlocking a trillion-dollar treasure trove of value.

Ariyasinghe emphasized that tokenization, the process of converting physical assets like stocks, bonds, or even invoices into digital tokens on a blockchain, is no longer just a speculative dream.

He pointed to Broadridge, a major financial services provider, launching a blockchain-based repo platform handling over $70 billion in daily transactions as a concrete example of its real-world impact.

Several key areas are attracting the attention of leading banks as they explore tokenization:

Trade finance: By automating documentation and facilitating faster settlements, tokenization can streamline trade finance processes, boosting efficiency and reducing costs.

Tracking goods and materials through tokenized supply chains could lead to increased transparency and improved inventory management, which could enhance fraud prevention.

Tokenized assets can also be easily fractionated and traded, potentially unlocking new investment opportunities for a broader range of participants, which could democratize access to financial markets and potentially increase liquidity for previously illiquid assets.

Ariyasinghe’s insight suggests that tokenization of RWAs is not a future promise but a present reality. While the full impact is yet to be seen, the involvement of leading financial institutions signals a significant step towards mainstream adoption and its potential to reshape the financial world.

Sources