Written by Kalp
Translation: Blockchain in Vernacular
In recent years, the financial world has undergone a revolutionary change brought about by the tokenization of real-world assets. This innovative way of representing and trading real-world assets on blockchain platforms is gaining attention worldwide, and many countries are actively promoting and regulating this technology. When we delve into the current status and future possibilities of tokenization of real-world assets, it is not difficult to find that we are on the verge of a financial revolution that may completely change the way we perceive and interact with assets.
1. The global pattern of tokenization of real assets
Multiple countries are leading the application and regulation of tokenization of real assets, each taking a unique approach and showing varying degrees of enthusiasm:
1) Singapore: A pioneer in tokenizing real assets
Singapore has become a leader in the tokenization of real-world assets. The Monetary Authority of Singapore (MAS) actively promotes and regulates tokenized securities through its Fintech Regulatory Sandbox. The launch of Project Guardian, a collaboration with the financial industry, further demonstrates Singapore’s strong commitment to exploring the economic potential and value-added applications of asset tokenization.
2) Switzerland: Building a comprehensive legal framework
Switzerland has taken a positive attitude and provided a comprehensive legal framework for the trading rights of tokenized securities through the Blockchain Act. The Swiss Financial Market Supervisory Authority (FINMA) supports tokenized securities and provides clear guidelines for their issuance, making Switzerland an ideal place for blockchain and tokenization projects.
3) United States: decentralized regulatory model across states
Although the United States has not yet established a federal framework for the tokenization of real assets, some states have taken the lead. Take Wyoming as an example. The state has passed a number of laws to build a regulatory framework for digital assets including tokenized securities. This state-level model provides room for innovative experiments and may also lay the foundation for a more detailed federal framework in the future.
4) EU: Markets in Crypto-Assets Regulation (MiCA)
The European Union is developing the Markets in Crypto-Assets Regulation (MiCA), which aims to provide a comprehensive framework for digital assets, including tokenized securities. Although the regulation does not specifically target the tokenization of real assets, it is expected to have a significant impact on the tokenization space across Europe and may set standards for other regions.
5) Japan: Revising existing laws
The Financial Services Agency (FSA) of Japan is developing regulations to allow the issuance of tokenized securities. By amending the Financial Instruments and Exchange Act to include security tokens, Japan is adapting its existing legal framework to accommodate this emerging technology.
6) UAE: Embracing blockchain and tokenization
The UAE, especially Dubai, is actively promoting the application of blockchain technology and tokenization. The Dubai Financial Services Authority (DFSA) has launched a digital asset regulatory framework covering tokenized securities, positioning the UAE as a center for blockchain innovation in the Middle East.
7) Hong Kong: Developing a comprehensive framework
Hong Kong’s Securities and Futures Commission (SFC) has issued guidelines on security token issuance, moving towards developing a comprehensive regulatory framework for virtual assets, including tokenized securities. The move demonstrates Hong Kong’s commitment to maintaining its position as a major financial center in the digital age.
8) Nigeria: Tokenization of Real Estate
The Lagos State Government of Nigeria has proposed an innovative plan to tokenize real estate, aiming to use blockchain technology to improve the transparency, efficiency and convenience of real estate transactions. This move is expected to increase the state's endogenous revenue.
2. The future of tokenization of real assets: expansion into new areas
As the tokenization of real assets continues to accelerate, it is expected to involve all aspects of the economy and society. Here are some areas that the government may consider adopting in the future:
1) Infrastructure Financing
The government can explore tokenizing infrastructure projects to achieve more efficient financing and management of public works. This may make infrastructure investment more accessible to the public and allow small investors to participate in large projects.
2) Public services
Tokenization can be applied to various public service areas, such as healthcare and education. For example, tokenized medical points can be used to manage and trade medical benefits more efficiently.
3) Energy and environmental assets
Tokenization of renewable energy credits or carbon offsets can create a more liquid market for these environmental assets, thereby accelerating the transition to sustainable energy.
4) Intellectual Property
The government may consider developing a framework for the tokenization of intellectual property to make the transaction and management of patents, copyrights, and trademarks in the digital realm more convenient.
5) Government bonds and securities
Tokenizing government bonds and securities could increase their accessibility to a wider range of investors and potentially reduce the costs associated with issuance and trading.
6) Land and property registration
Following Nigeria’s example, other governments may also explore tokenizing land and property registries to increase transparency, reduce fraud, and streamline real estate transactions.
7) Digital identity
Although digital identities are not assets in the traditional sense, they can be tokenized to provide secure, portable, and user-controlled identity verification for a variety of government and private sector services.
8) Cultural and historical assets
Tokenization can be used to fractionalize the ownership of cultural and historical assets, allowing a wider public to participate in their protection and appreciation.
9) Pension and social security system
Governments may consider tokenizing pensions and social security benefits to create a more flexible and portable system for citizens.
10) Public transportation
Tokenized transportation points can be used to create a more efficient and flexible public transportation system, and even have the potential to integrate multiple modes of transportation and achieve convenient management through an easily tradable token.
3. Outlook for the future
The global application of real-world asset tokenization is accelerating, and countries are gradually realizing that it can not only transform the financial sector, but also extend to a wider range of application scenarios. From Singapore’s positive initiatives to Nigeria’s innovative real estate tokenization plan, governments are exploring various ways to integrate this technology into their financial and regulatory frameworks.
Looking ahead, the potential applications of real-world asset tokenization are almost endless. From infrastructure financing to environmental assets, from intellectual property to public services, tokenization has the potential to reshape the way we understand, manage, and trade all kinds of assets.
However, as with any transformative technology, the road ahead is not without challenges. Governments and regulators need to adapt and develop frameworks that promote innovation while protecting consumer rights and financial stability. The global landscape of real-world asset tokenization is still evolving, and how different countries navigate this new frontier will be interesting to watch in the future.
What is certain is that the tokenization of real assets is no longer a distant concept, but a reality that is rapidly reshaping the global financial landscape. As more and more countries adopt and explore the potential applications of this technology, a more interconnected, efficient and inclusive financial world is gradually emerging. The tokenization revolution has arrived and is setting off a global wave.
