Five Asset Classes Primed to be Tokenized within the Financial Industry, Sooner than Later
According to a recent article by Coinspeaker, there are five assets that are moving toward tokenization in the financial industry. The five assets are as follows:
Venture Capital (VC) funds are very liquid. Equity Tokens, also known as ETOs, may enable more individuals to invest in the asset class, and with more investors in the pool, venture capitalists certainly stand to gain.
Precious metals include those such as gold and silver. If they were tokenized, there may be an opportunity for fractional ownership of the assets. In addition, it may also lead to increased transparency in a market that is traditionally known as being conservative.
Real estate may benefit from tokenization as well because it gives investors the opportunity to purchase a fraction of a property and to earn capital gains and dividends. Although, it should be noted that for traditional buyers, such fractional ownership may not be a good idea.
Also, there are questions that arise as to what happens when a fractional purchaser who originally makes a purchase for investment decides to use the space for something else. These are issues that would need to be considered as the space goes forward.
And, it seems that the space is moving ahead. For instance, there are companies such as Blockchain App Factory, which tokenizes real estate that is worth $225 million in a market that is estimated at $250 trillion, but that only offers 2.5% liquidity. Real estate investment through tokenization may promote diversity when it comes to investment.
Art and Luxury Goods
Art and luxury goods are also an area where tokenization could happen. The tokenization process may remove the traditional auction by art houses and galleries to a marketplace that is more accessible, transparent, and friendly for investors of any background.
Again, this area also faces the same issue as real estate – the details need to be figured out as the space goes ahead.
Lastly, Stablecoins are usually pegged against a fiat currency to reduce market-volatility. As more people show interest in stablecoins, they may be an area that ends up reducing transaction costs and processing times and volatility.