DeFi Tokenization: Could 2023 Be the Year of Revolution?
1. März 2023• Industry experts gathered to discuss whether DeFi tokenization of real-world assets (RWA) could be the next big thing in 2023.
• Challenges discussed included liquidity, fractionalization, complexity of legal and regulatory requirements, and SEC stalling in the US.
• Tokenizing assets for DeFi is difficult due to regulation, but fractional shares offer potential cost savings and greater liquidity.
DeFi Tokenisation Could Drive Growth in 2023
Industry leaders gathered at the Blockchain Economy London Summit to explore whether DeFi tokenisation of real-world assets (RWA) could be the next big thing in 2023. Discussions focused on how this technology could drive growth through liquidity and fractionalisation.
Challenges for Tokenizing Assets
Prashant Malik Senior Technology Lead – Digital Assets at HSBC spoke about building a tokenization platform, highlighting that technology is not the main issue – instead it’s more complicated due to legal and regulatory requirements. He also raised concerns that if everyone builds their own private chains there is a risk of fragmenting an existing ecosystem.
SEC Stalling Progress in US
Jonathan Dunsmoor from Dunsmoor Law outlined the difficulty presented by American regulations when it comes to DeFi tokenization, explaining that while other countries look towards America for guidance, over the past ten years evolution from CeFi to DeFI has found difficulty with regulation. He stated that regulators – particularly those in the US were stalling progress on this front.
Benefits of Fractional Shares
Lennix Lai from OKX noted that tokenizing RWA has potential to provide immediate liquidity for an asset as well as reduce costs for centralized intermediaries which could lead to larger adoption and greater liquidity when it comes to fractional shares – making them an attractive option.