Readers who have been with us for a while knew this was coming, link after the jump.
From CoinTelegraph, January 23:
BlackRock CEO Larry Fink said he’s “a huge believer in crypto” and urged the SEC to “rapidly approve” asset tokenization. Is this a net positive for the crypto sector?
Larry Fink, CEO of the world’s largest fund manager BlackRock, has expressed his hope that the US Securities and Exchange Commission (SEC) will swiftly approve the tokenization of bonds and stocks. During a CNBC interview on Jan. 23, Fink strongly endorsed digital assets, underscoring their potential to democratize investments.
The open question is whether this shift toward tokenizing traditional assets can benefit cryptocurrencies, which sectors might flourish, and which projects might face heightened competition.
There is no doubt that 24-hour worldwide trading and the transparency of blockchain technology bring advantages to assets such as bonds and stocks. However, this move relies on regulatory updates and approvals from relevant government agencies. More importantly, regulated assets may not align well with decentralized finance (DeFi).
Tokenization’s impact on stablecoins, memecoins, DeFi and decentralized oracles
Tokenizing bonds that produce stable yields could pose a challenge to stablecoins by providing a digital asset tied to real-world interest rates. This development would introduce new instruments into financial markets, competing for liquidity and user confidence as investors seek tangible returns.Similarly, tokenized stocks like GameStop or AMC could function as onchain assets with volatile price fluctuations, backed by communities in a manner reminiscent of memecoins. This evolution might affect retail trading platforms as investors gravitate toward regulated but still speculative stock tokens rather than purely speculative memecoins.
Source: TradingView / Cointelegraph
The integration of tokenized bonds and stocks also broadens the offerings on established DeFi platforms, potentially driving higher total value locked. It would impact decentralized exchanges and lending protocols, as they could incorporate traditional asset classes to create new revenue streams.
By tokenizing real-world assets, direct ownership and pricing data can be embedded within a token’s native structure, reducing the need for external oracles. This shift also affects blockchain data providers, as onchain assets inherently include their own data.
Basic decentralized oracles workflow.
Source: Pontem Network
The tokenization of bonds and stocks greatly expands the pool of assets available for onchain derivatives, influencing decentralized exchanges and lending platforms looking to offer diverse markets. Synthetic tokens that mirror these securities could also bypass certain regulatory barriers, opening new opportunities for margin trading and yield generation.
Stocks and bond tokenization could take longer than anticipated...
....MUCH MORE
If interested see also:
"Tokenized, Inc: BlackRock's Plan To Own The Fractionalized World"
