What is Tokenisations of funds?
Tokenisation refers to the process of converting a physical asset, such as a piece of artwork or a share of stock, into a digital token that can be bought, sold, and traded on a blockchain. This process involves creating a digital representation of the asset, which can be easily bought, sold, and transferred using blockchain technology.
Tokenisation can offer a number of benefits for funds, including increased liquidity, reduced transaction costs, and improved accessibility.
One of the main benefits of tokenising funds is to increased liquidity. By converting a fund into a digital token, investors can easily buy and sell their holdings on a blockchain, which can help to increase the liquidity of the fund. This is especially useful for funds that may be difficult to sell or trade in traditional markets, as it allows investors to more easily exit their positions. E.g Bonds, real estates.
Tokenisation can also help to reduce transaction costs for funds. Because blockchain technology allows for the automation of many financial processes, such as the transfer of ownership and the execution of trades, it can help to reduce the cost of buying and selling fund shares while ensuring its tampered proof.
In addition, tokenisation can improve the accessibility of funds, as it allows for the creation of new investment opportunities that may not have been possible before. For example, tokenisation can allow for the creation of security tokens, which represent ownership in a particular asset, such as a piece of real estate or a private company. These tokens can be bought, sold, and traded in a similar manner to traditional stocks or bonds, but with the added benefits of blockchain technology, such as increased in transparency and reduced transaction costs.
SUMOTEX has been the pioneer of tokenisations of Assets, through our AssetFi protocol, we have enabled tokenisations of assets worth a total of 2.5mil USD with Homevest, a property management firm in Malaysia that has existing properties that needs liquidity.