Tokenisation to open doors for investors

As the government gathers pace in regulating digital assets to better protect consumers, tokenisation is making investment in assets previously off limits to retail investors a reality.

- Matthew Wai

CloudTech Group general manager, custody Lucia Uen says tokenisation is breaking down barriers for retail investors to access assets such as commercial property loans and private equity, which have commonly been the domain of the institutions.

By converting such assets into blockchain-backed tokens, investors can gain access by way of fractional ownership. In addition to broadening access for retail investors, Uen says tokenisation can also create a more liquid market.

"When you have multiple people who can transfer these assets instantaneously on the blockchain, you are creating a secondary market that's way more liquid than it is now, and it is all verified," Uen says.

It's also much more cost-efficient, she says.

"You can achieve instant settlement by eliminating the multiple middlemen who handle clearing, settlement, or reconciliation of investments," Uen explains.

"... it will happen in T+0, as opposed to the T+2 settlement. That efficiency can also extend to the fact that it is, to a large extent, a single system. So, you can have uniform settlement and trading protocols."