Asia’s largest asset managers and financial services firms have come together and published a roadmap, interpreting a future where tokenized securities exist as a part of the mainstream institutional apparatus. As per the reports from the Asia Securities Industry and Financial Markets Association, the transactions of tokenized securities, if registered in the blockchain, hold the potential of becoming an essential tool for financial companies under suitable circumstances.
The report including the Citigroup Inc., Nomura Holdings Inc., PriceWaterhouseCoopers, and Standard Chartered Plc as authors along with the law firms Norton Rose Fulbright and Linklaters, states, “Tokenized securities could represent innovative new financing and capital raising model that is efficient, scalable and provides liquidity. The link between traditional financial products and instruments and blockchain technology offers stakeholders the reliability of a regulated instrument, combined with the benefits afforded by a blockchain. Because they are generally regulated as securities, they will also bring more trust and support in the crypto market.”
Tokenized securities are yet the latest concept in the tech industry. They can render certain significant advantages, including speedy settlements, automated compliance, and all-day round trading. However, ASIFMA also mentions the importance of the roles of regulators, stating, “Tokenized securities will require innovative solutions that go beyond technology. In some cases, legal reform will be required.”
The association reports that regulators have work framed for them as uncompromising clarity is needed across all steps comprising token creation, selling and purchasing of tokens, tax implications, offering requirements, and more.