Don't get left behind: Tokenisation and the new financial revolution

IN A WORLD defined by digital transformation, few financial innovations hold as much promise as the tokenisation of assets. It has been a talking point in financial circles for a while now - and for very good reason. In a sense, it has become the very real meeting point between traditional finance and blockchain technology.

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Tokenisation refers to the process of turning ownership of a real-world asset like property, stocks, fiat currencies, or commodities into a digital token that lives on a blockchain.

Each token typically represents an ownership stake in the underlying asset. As an example, right now Luno offers 58 tokenised US stocks and exchange-traded funds (ETFs) on our app.

The uptake since the introduction of these stocks has been nothing short of phenomenal, with our first month projections being achieved in only the first few days. Each token is backed by actual shares held in custody, and its price tracks the real-time value of the underlying stock.

To some it might seem like inserting an "extra step". Why create a token that represents a currency, commodity, an ETF or even real estate, when you can simply invest in "the real thing?" The question ignores the new financial reality in which we all live. And any financial institution that ignores this reality will most likely not survive the financial revolution taking place.

Significant benefits of tokenisation are fractionalised ownership and 24/7/365 trading. Fractionalised ownership means that investors can now easily gain exposure to an asset without having to buy the whole thing.