Can regulation keep up with the tokenization boom?
The post Can regulation keep up with the tokenization boom? appeared on BitcoinEthereumNews.com.
Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial. Imagine a world where everyday investors can own a part of underground oil reserves or a share in a skyscraper with the click of a button. This is the promise of tokenizing real-world assets—a technology poised to unlock trillions of dollars in traditionally illiquid markets like real estate, commodities, and infrastructure. However, while this innovation is set to revolutionize global finance, the regulatory frameworks needed to support it are often being outpaced by the rapid developments in this space. Security tokens, such as those representing RWAs like property, commodities, or oil and gas, have the potential to transform how we invest, but they also come with strict regulations that need to be followed. The growing market for tokenized assets According to the Boston Consulting Group and World Economic Forum, the tokenized asset market is expected to reach 16 trillion by 2030. Another report suggested that the market value for tokenized assets could soar up to $10 trillion in a ‘bull case’ scenario or $3.5 trillion in the ‘bear case’ by 2030. This projection covers a wide range of real-world assets, from real estate to commodities like oil and gas, and demonstrates the growing appetite for fractional ownership models that allow everyday investors to participate in markets that were previously the domain of institutional players. Yet, for all its promise, the road to tokenizing these assets is paved with regulatory hurdles. The challenges of fragmented regulations Specifically, one of the primary challenges facing tokenization today is the fragmented nature of regulatory frameworks across different jurisdictions. While some countries, such as Liechtenstein and Switzerland, have developed clear regulatory structures for security tokens, many other key markets remain ambiguous or…
Filed under: News - @ October 18, 2024 12:22 pm