The lack of a robust ecosystem, liquidity, industry standardization and legal clarity are among the key obstacles that prevent tokenization from having a conventional impact, according to a new report.
The Organization of the Organization for Economic Cooperation and Development (OECD) explored the eight highest impediments to tokenization worldwide, which has prevented the sector from exploiting despite the ambitious objectives of experts. Some, such as BCG, have estimated that tokenization could unlock $ 16 billion in value by 2030, although the most recent estimates have been modest, such as the $ 2 billion of McKinsey.
The OECD is an intergovernmental organization with 38 members that encourages economic progress and world trade.
In the upper part of the obstacle list there is a lack of liquidity and the absence of an ecosystem. The report indicates that the tokenization lacks a critical mass of investors, which makes the emitters hesitate to commit to tokenize assets. It is a cyclic enigma, since investors doubt to deepen tokenized assets due to lack of liquidity. The OECD believes that a catalyst is needed to solve this, such as sovereign bond emissions in a public block chain. However, financial institutions have taken leadership in the broadcast, and in most cases, customers are their fellow banks.
In an extension of this first challenge, the OECD says that the lack of scale has prevented adoption. Once again, the scale can only come from expanding the scope of pilots to live products, which depends on an increase in the number of investors.
A more unique challenge is the lack of payments integrated in blockchains. The OECD believes that the tokenized money, such as digital currencies of the Central Bank (CBDC), allows delivery at payment height (DVP), which allows payment in the chain.
This challenge is linked to the use of private networks and blockchains permitted in tokenization. A public decentralized block chain, such as BSV, would allow payments without problems and snapshots using BSV as a bitcoin based stablcoin. However, even in such a scenario, the OECD says that participants would still face “risks of counterpart and liquidity.”
“As such, an ideal payment instrument for DVP would be the wholesale CBDC … Tokenized deposits (money from the Tokenized Commercial Bank) could also be an alternative. In the future, a common interface for CBDC and tokenized assets could be foreseen by central banks, ”said the report.
Other challenges include the lack of custodians for tokenized assets, the presence of multiple blockchain networks, the lack of interoperability between these networks and the lack of global token standards.
There are also legal problems. For example, most jurisdictions have not yet legally recognized tokens as equivalent to the legal property of underlying assets.
These challenges are gradually addressed. Luxembourg recently approved Blockchain Law 4, which simplifies the process of emission and management of tokenized values. One of the key amendments was to eliminate the need to involve a central values deposit (CSD). The law introduced the concept of a control agent issuing the Token, maintains custody and supervises its reconciliation.
Even so, market experts believe that tokenization will revolutionize the financial industry.
“By tokenize those assets, it allows natural efficiency. It can even be bigger than the Internet. It is fundamentally to rethink the way markets work, ”says Rob Krugman, Broadridge digital director (Nasdaq: BR). The Fintech giant has played billion dollars in resting over the years, but has not yet integrated Blockchain.
Clock: Tokenized was built with blood, sweat and tears
https://www.youtube.com/watch?v=Dhsjsbevrh8 Title = “YouTube Video Player” Framebreroorder = “0 ″ Persew =” accelerometer; Autoplay; clipboard-writing; Encrypted half; gyroscope; image image; Web-Share “Referrerpolicy =” Strict-Origin-When-Cross-Origin “Suprendlefulscreen =” “>
Fountain:
