I have seen my reasonable part of ‘hype-cycles’ of the dot-com boom to the first currency offer (ICO) Rage-Dus I understand why there is skepticization around tokenization. It is undoubtedly the latest fashion word. But after I had been looked at first of the past and rising and falling firsthand, I can tell you that it is different. Why?
Why tokenization will not go the way of the ICO tree
The following is a main article written by Eric Piscini, the Chief Executive Officer of Hashgraph.
Let’s take a step back and open a few pages from history. There you will see that some of the greatest bubbles of the 20th century were the result of innovation that recorded the imagination of people before the real use of the real world was clear or that the solid regulations were set.
Take the DOT-COM GIEK of the late 90s. The internet was ready to change everything, but speculation exceeded many nuclear realities, such as income, sustainable growth and profitability, which led to a crash that demonstrated more than $ 5 trillion to market value. The financial crisis of 2008 was caused by a lack of regulations that enable the effects and opaque financial instruments covered by mortgage to do damage to the global economy. Likewise, the non -regulated token sale were behind the 2017 ICO tree. When reality finally made hype, projects that quickly disappeared millions quickly disappeared at night.
At the same time, history also shows that the Dot.com bubble has not killed the internet and that the ICO spit was not the end of blockchain. Instead, these seismic moments refined the quality of the built projects. Take the 2008 crash, for example: it destroyed the global economy, but it also led to stronger regulations, more transparency and a better risk management to prevent this from happening again.
If we learn from history and ensure that tokenization delivers real-world value with all the right crash barriers to protect consumers and companies, the current growth wave will transform mere speculation into the basis of a transparent, more efficient and resilient financial system.
Efforts are already underway. One of the biggest concerns about tokenization is the lack of real-world use. We all saw “meme -tokens” shoot up and then collapse at night. Nevertheless, tokenization proves all its value as a way to modernize asset management and to change fundamentally as we know it. For example, institutional hurt assets as being American treasury is taken over by large financial giants such as BlackRock, JPMorgan and HSBC, all of which use Blockchain to modernize the asset markets.
Real-World applications continue the trend. Tokenized ETFs, carbon credits and financial instruments improve the market efficiency. Recently the industrial giant Franklin Templeton joined companies such as Canary Capital, Grayscale and Wisdomtree when applying for tokenized ETFs. In the meantime, Stablecoins, also known as Tokenized cash, which once seemed experimental, now feeding a $ 205 billion market for global payments and settlements. The concept is not new, but it finally touches its pass evidence that real innovation takes time to find product market fit.
Regulators also adapt to ensure that digital assets develop responsible, because fragmented markets and inconsistent supervision are risks. Tokenized Real-World Assets (RWAS) offer opportunities, but without the correct risk assessment they can threaten financial stability and reduce the protection of investors. Just like in traditional markets, liquidity management and due diligence are crucial.
To tackle these risks, policy makers urge standardized frameworks. The US has recently taken daring steps to position itself as a leader, with the appointment of a ‘crypto tsar’ aimed at providing regulatory clarity. Europe continues with Mica, the VK meets with its FCA Crypto route map, Hong Kong has introduced a license regime for crypto exchanges and tokenized effects, and the Virtual Assets Regulatory Authority (VARA) of the VAE sets new standards for digital Activa.
However, digital assets are of nature decentralized and work across borders, which requires global coordination. Without regulatory coordination, even strong frameworks will fail. To ensure that tokenization improves financial markets instead of destabilizing, supervisors and the private sector must collaborate on clear governance, which guarantees long -term interoperability and stability.
With institutional momentum, regulatory progress and acceleration of the Real-World acceleration, tokenization is much more than a passing ‘trend’. Ultimately, the success will decrease how we continue to navigate and deal with the risks, so that tokenization can be seamlessly integrated into finance and by 2030 can become a $ 10T+ market.
Moreover, creating strong secondary markets for all kinds of Tokenized Activa is really accessing access to all activa classes around the world. We will claim the victory when someone in the world can invest in a fraction of a real estate project in another country in another country and can sell back 2 weeks later with regulatory and technical friction.
As soon as we are there, investors will not concentrate on mechanics – just as they do not consider the technology behind shares and bonds today. They will concentrate on the real value that it unlocks. Employee shares investing will be managed transparently at the chain, companies will secure immediate financing with tokenized inventory and real estate, raw materials and intellectual property will act seamlessly as a digital asset all in a more efficient, worldwide financial system.
Just like the internet in his early days, the tokenization is at a point where its actual value becomes clear. It is not a utopian idea or a bubble waiting for popping – it is the future of financial infrastructure. The next phase is not about proving that it works; The point is to use the potential to shape industries and markets worldwide. Now it is up to us to shape that future in a responsible manner, so that tokenization goes through the test of time.
