The Tokenization of Stocks

The Digital Asset Investor discuses Securitize, who is looking to tokenize corporate debt

In a previous article we have discussed the use of smart contracts in the creation of ERC-20 tokens. Blockchain technology can also be used to tokenize real world assets such as stocks, real estate and commodities. In this article we will look at some of the benefits achieved through tokenization over traditional systems used to trade assets.

Tokenizing existing assets on the blockchain

The tokenization of existing assets on a blockchain allows for faster updates with transactions being tracked more easily and with a greater level of transparency than in current systems. David Stein argues that a system of tokenization for real-world assets would allow for more liquidity in trading. Tokenized products could be offered in fractional amounts and 24 hours a day, unlike in traditional markets. Smart contracts could be used to tokenize existing physical assets such as gold, silver or real estate. This allows for the potential for a high level of growth in the digital asset space in the future as tokenized digital assets begin to “swallow” existing traditional asset classes like stocks, bonds, real estate and commodities.

Hg Exchange to create “one-stop solution” for token issuers, buyers, sellers and market makers

Created by startups Zillqa and MaiCoin, Southeast Asia based Hg Exchange is looking to create a marketplace that will allow for the tokenization of stocks. Hg Exchange will target both high-growth startups and decacorns (companies valued above $10 billion such as Uber, Airbnb, Space X, Grab and Didi Chuxing). DX Exchange notes these decacorn stocks are typically out of reach for the average investor. Zillqa will be launching its own mainent January 31, 2018. The mainnet will be used to facilitate the tokenization of private company shares on its network.

Nasdaq powered DX Exchange tokenizing stocks using ERC-20 protocol

Estonia based DX Exchange is launching a trading platform which will allow for the purchase of crypto tokens. These tokens will represent shares of real world stocks, backed in a 1:1 nature. DX Exchange has an agreement with MPS Marketplace Securities for the purchase of real world stock based on customer demand, generating ERC-20 tokens to represent each share. At launch MPS has planned to purchase shares in AlphaBet, Apple, Amazon.com, Facebook, Microsoft, Tesla, Netflix, Baidu, Intel and Nvidia.

Securitize joins IBM Blockchain Accelerator Program

Securitize has created a protocol and platform to allow for the digitization of securities on the blockchain. Recently IBM revealed that Securitize has been selected as one of the 10 companies to join its Blockchain Accelerator program. Carlos Domingo, Co-Founder & CEO of securitize has stated plans to integrate hyperledger into the Securitize platform. This would allow for the enabling of debt issuance on the blockchain.

Note: DigitalAssetInfo.net is not a financial adviser. All information is for entertainment purposes only and does not constitute financial advice.

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