blockchain-revolution/” title=”The Blockchain Revolution”>tokenization likely to take more than three years to fully take hold: think tank survey” loading=”lazy” class=”w-full”/>
- Think tank OMFIF found that 65% of survey respondents believe bonds are most likely to be tokenized.
- Countries see blockchain and tokenization as a promising future, with experiments being conducted by the UK and the Bank for International Settlements.
A survey conducted by think tank OMFIF (Official Monetary and Financial Institutions Forum) found that the majority of respondents believe significant levels of tokenization will arrive in three or more years.
The survey was made up of a range of market participants, with “92% believing that financial markets will eventually experience a significant degree of tokenization, but all stating that this is at least three years away.” OMFIF surveyed 26 institutions, including treasuries, banks and asset managers across Europe, Africa, Asia and South America.
Countries around the world see blockchain and tokenization as the future. According to an OMFIF survey, 42% of respondents agreed that blockchain will be the primary form of financial market infrastructure. Tokenization is the digitization of real-world assets (RWA).
British industry body UK Finance announced on the morning of the 17th (local time) that it has completed the experimental phase of a tokenization, central bank digital currency (CBDC) and distributed ledger platform. Banks including Barclays, Citi UK, HSBC and Natwest participated in the experiment along with seven other members of UK Finance.
On the 16th, the Bank for International Settlements (BIS), which is considered the central bank for central banks, said that 40 select companies would join the BIS to explore tokenization.
OMFIF also found that 65% of respondents believe bonds are most likely to be tokenized. Bonds have already been tokenized on the blockchain. As of July 31, 14 blockchain bonds have been issued with a total value of $1.2 billion, roughly matching the value of 16 bonds issued in 2023 with a total value of $1.7 billion.
Wholesale CBDCs – digital tokens issued by central banks and used exclusively by financial institutions – are also being widely experimented with.
“Our survey finds that market participants clearly prefer a wholesale CBDC over other forms of tokenized cash,” the report said, adding: “However, effective adoption will depend on strong regulation.”
| Translation and editing: Yuka Hirose
| Image: Shutterstock
｜Original text:OMFIF Survey Respondents Believe Substantial Level of Tokenization is Still Three Years Away
What are the main benefits of tokenizing real-world assets like bonds?
Table of Contents
Tokenization of Real-World Assets: A Future in the Making, but Not Just Yet
The world of finance is on the cusp of a revolution, with blockchain technology and tokenization promising to transform the way we invest, trade, and interact with financial markets. A recent survey by think tank OMFIF (Official Monetary and Financial Institutions Forum) has shed light on the pace of adoption, with a majority of respondents believing that significant levels of tokenization will arrive in three or more years.
The Rise of Tokenization
Tokenization, the digitization of real-world assets (RWA), is seen as a key driver of this change. By converting traditional assets into digital tokens, investors can buy, sell, and trade them on blockchain-based platforms, increasing liquidity, transparency, and efficiency. The OMFIF survey found that 92% of respondents, comprising 26 institutions across Europe, Africa, Asia, and South America, believe that financial markets will eventually experience a significant degree of tokenization.
Bonds Lead the Tokenization Charge
So, which assets are most likely to be tokenized first? According to the OMFIF survey, a staggering 65% of respondents believe that bonds will be the first to be tokenized. This is no surprise, given that bonds have already been successfully tokenized on the blockchain. As of July 31, 14 blockchain bonds have been issued, with a total value of $1.2 billion, roughly matching the value of 16 bonds issued in 2023 with a total value of $1.7 billion.
Countries Embracing Blockchain and Tokenization
Governments and regulatory bodies around the world are taking notice of the potential of blockchain and tokenization. The UK, for instance, has just completed an experimental phase of a tokenization, central bank digital currency (CBDC), and distributed ledger platform, involving major banks such as Barclays, Citi UK, HSBC, and Natwest. Similarly, the Bank for International Settlements (BIS), the central bank for central banks, has announced that 40 select companies will join the BIS to explore tokenization.
Wholesale CBDCs: The Next Frontier
Wholesale CBDCs, digital tokens issued by central banks and used exclusively by financial institutions, are also being widely experimented with. The OMFIF survey found that market participants clearly prefer wholesale CBDCs over other forms of tokenized cash, highlighting their potential to revolutionize the way financial institutions interact with each other.
A Future Worth Waiting For
While the OMFIF survey suggests that significant levels of tokenization are still three or more years away, the pace of innovation and experimentation is undeniable. As countries and financial institutions continue to explore the potential of blockchain and tokenization, we can expect to see a gradual shift towards a more efficient, transparent, and connected financial system.
Key Takeaways
92% of respondents believe that financial markets will eventually experience a significant degree of tokenization.
65% of respondents believe that bonds are most likely to be tokenized.
Countries such as the UK and organizations like the BIS are experimenting with blockchain and tokenization.
Wholesale CBDCs are gaining popularity as a preferred form of tokenized cash.
Conclusion
Tokenization of real-world assets is an exciting development that promises to transform the world of finance. While there may be a few years to go before it becomes a mainstream reality, the progress being made is undeniable. As the financial industry continues to evolve, one thing is certain – the future of finance will be shaped by blockchain and tokenization.
Meta Description: Discover the latest developments in tokenization of real-world assets, including the OMFIF survey, country experiments, and the rise of wholesale CBDCs.
Keywords: Tokenization, real-world assets, blockchain, OMFIF survey, bonds, wholesale CBDCs, central bank digital currency, distributed ledger platform, UK Finance, Bank for International Settlements.
What is the timeline for the widespread adoption of tokenization in financial markets?
The Blockchain Revolution: Tokenization of Real-World Assets to Take Off in Three Years, Says Think Tank Survey
The world of finance is on the cusp of a revolution, with blockchain technology and tokenization promising to transform the way we invest, trade, and interact with financial markets. According to a recent survey conducted by think tank OMFIF (Official Monetary and Financial Institutions Forum), the majority of respondents believe that significant levels of tokenization will arrive in three or more years. This article explores the benefits of tokenizing real-world assets, the current state of blockchain adoption, and the promising experiments being conducted by countries around the world.
What are the main benefits of tokenizing real-world assets like bonds?
Tokenization, the process of digitizing real-world assets (RWA), offers numerous benefits, including increased efficiency, transparency, and accessibility. By tokenizing assets like bonds, investors can enjoy:
- Increased liquidity: Tokenized assets can be easily traded and transferred, allowing for faster and more efficient transactions.
- Improved transparency: Blockchain technology provides a tamper-proof record of transactions, ensuring greater transparency and accountability.
- Enhanced security: Tokens are stored on a decentralized ledger, reducing the risk of fraud and counterparty risk.
- Accessibility: Tokenized assets can be traded in smaller denominations, making them more accessible to a wider range of investors.
- Cost savings: Tokenization can reduce administrative costs associated with traditional asset management.
Countries see blockchain and tokenization as the future
Governments and financial institutions around the world are recognizing the potential of blockchain and tokenization to transform financial markets. In the UK, industry body UK Finance has completed an experimental phase of a tokenization, central bank digital currency (CBDC), and distributed ledger platform, with major banks like Barclays, Citi UK, HSBC, and Natwest participating. Meanwhile, the Bank for International Settlements (BIS) has selected 40 companies to explore tokenization.
Bonds leading the way in tokenization
According to the OMFIF survey, 65% of respondents believe bonds are most likely to be tokenized. This is not surprising, given that bonds have already been tokenized on the blockchain. As of July 31, 14 blockchain bonds have been issued with a total value of $1.2 billion, roughly matching the value of 16 bonds issued in 2023 with a total value of $1.7 billion.
Wholesale CBDCs: A promising development
Wholesale CBDCs – digital tokens issued by central banks and used exclusively by financial institutions – are also being widely experimented with. OMFIF’s survey found that market participants clearly prefer a wholesale CBDC over other forms of tokenized cash. Effective adoption, however, will depend on strong regulation.
Conclusion
While the majority of respondents believe that significant levels of tokenization will arrive in three or more years, the benefits of tokenizing real-world assets are clear. With countries and financial institutions around the world exploring the potential of blockchain and tokenization, the future of finance looks promising. As the world moves towards a more digital and decentralized financial system, it is essential to stay informed about the latest developments in this exciting and rapidly evolving field.
Keyword-rich phrases:
Blockchain technology
Tokenization
Real-world assets (RWA)
Financial markets
Central bank digital currency (CBDC)
Distributed ledger platform
Wholesale CBDCs
Bonds
Tokenized assets
Digital tokens
* Decentralized financial system
