In a Financial Times article, asset management partner Melissa Bender, who leads the firm’s cryptocurrency and blockchain group, discussed the rise of digital currency and blockchain technology in the tokenization of real estate.
Assets such as a house or hotel are split into digital tokens that represent ownership. Each token can hold information such as the asset’s ownership history, trading and regulatory details. The tokens exist on a blockchain, which acts as a digital ledger and record keeper.
Tokenizing global home equity alone could be worth $3.2 trillion by 2030 according to analyst estimates.
“People interested in tokenized products are potentially getting exposure to asset classes that are less accessible to them,” said Melissa.She notes that liquidity is a concern. “Until there are more participants, you are going to be facing the challenges of holding an illiquid asset,” said Melissa.
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