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On July 17, 2023 two partners from the McKinsey consultancy took the stage at the New York Stock Exchange to tell dozens of government regulators and financial executives about the charms of the blockchain, insisting that its utility goes far beyond the scandal-ridden cryptocurrency market.
Bitcoin, ether, solana and the more than 10,000 other cryptos are down 60% from their November 2021 peak, a loss of $2 trillion in market value. Crypto platforms have been riddled by regular hacks and its most important firms have come under attack by regulators.
Still the consultants insisted, the technology underlying this digital money was still viable and had a bright future…Continue reading….
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Source: Why Tokenization Is Failing
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Critics:
The process of creating tokenized assets involves several steps—defining the token type (fungible or non-fungible), selecting the blockchain to issue the tokens on, selecting a third-party auditor to verify off-chain assets, issuing the assets, and more.Tokenization lets you digitally represent asset ownership for any tangible or intangible asset — stocks or bonds, cash or cryptocurrency, data sets or loyalty points — on a blockchain.
Once your asset is represented by a token, you can quickly and cost-effectively transfer or trade it, use it as collateral and more. Tokenization of real-world assets refers to the process of converting real-world or traditional assets—such as equities, bonds, real estate, or commodities—into digital tokens on a blockchain platform. WisdomTree is an early adopter of tokenizing traditional assets like mutual funds, bonds, and gold.
Tokenization replaces a sensitive data element, for example, a bank account number, with a non-sensitive substitute, known as a token. The token is a randomized data string that has no essential or exploitable value or meaning. In Python, tokenization in NLP can be accomplished using various libraries such as NLTK, SpaCy, or the tokenization module in the Transformers library.
These libraries offer functions to split text into tokens, such as words or subwords, based on different rules and language-specific considerations. Another risk associated with tokenization is the lack of regulatory framework. Since the technology is still relatively new, many governments have yet to establish clear regulations around tokenization, leaving investors and businesses open to legal risks.
Banks are drawn to blockchain technology for its ability to “tokenize” traditional assets like stocks and Treasury bills, making trading them faster and cheaper. Tokenization is the process of creating a digital representation of a real thing. Tokenization can be used to protect sensitive data or to efficiently process large amounts of data. A terracotta soldier figurine emerging from a digital tablet.
What are tokenised funds and how do they differ to traditional funds? A tokenised fund, which may also be known as a digital fund or a BTF (blockchain-traded fund) is one where shares or units in the fund, or a feeder fund for it, are digitally represented and can be traded and recorded on a distributed ledger. By 2030, tokenization in private markets could reach nearly USD4 trillion in value, an 80x growth rate, according to a Citi forecast.
Another report from asset manager Alliance Bernstein estimates that up to 2% of the global money supply could be tokenized over the next five years. Moving forward, our strategy includes securing digital payment licences in Taiwan, Dubai and Abu Dhabi,” he added. Founded in 2017, Tokenize has operations in key Asian markets including Singapore, Malaysia and Vietnam, serving both individual and institutional investors.
Asset tokenization presents a solution by digitizing assets and enabling fractional ownership, thereby increasing liquidity and accessibility. Through tokenization, assets become divisible into millions or billions of tokens, facilitating trading on accessible exchanges without intermediaries. Already industries including healthcare, real estate and legal services are using a form of tokenization to safeguard their data.
In the future network tokens may also be able to incorporate identification and payment data to create a seamless and more personalized experience for customers. Turning these assets into digital tokens makes them more easily divisible, allowing for fractional ownership that enables more people to invest, which can in turn make the markets for those assets more liquid.
Tokenizers may treat numbers inconsistently, breaking them down into separate tokens or keeping them as part of a token. Challenge: Inconsistent tokenization of numbers can impact the interpretation of numerical information, especially in tasks involving mathematical or quantitative analysis. Existing legal systems may not recognize tokenized asset ownership or digital ownership rights, potentially leading to problems with enforcing ownership or transferring rights.
As the technology matures and regulatory frameworks evolve, we can expect to see more tokenization migrating to public blockchains and a new wave of innovation. However, at least for the near future, the majority of institutional tokenization will take place on closed, permissioned networks. Blockchain-based tokenization streamlines the process of issuing, transferring and settling asset ownership, reducing administrative overhead and eliminating intermediaries.
This efficiency can lead to lower transaction costs and faster settlement times compared to traditional methods. The benefits of tokenization are a better experience and greater safety and security. Because fraud risk is lower with tokenized transactions, approval rates are higher, which means a lesser chance of your bank declining a transaction.
The most common way of forming tokens is based on space. Assuming space as a delimiter, the tokenization of the sentence results in 3 tokens – Never-give-up. As each token is a word, it becomes an example of Word tokenization. Tokenization, the process of converting an asset or the ownership rights of an asset to a digital form using blockchain technology, has gained significant traction throughout the financial services industry.
Investors suggest they may allocate 7% to 9% of their entire portfolio to tokenized assets by 2027.
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