Web3 industry leaders highlighted that tokenization is enabling faster transactions and greater liquidity across financial markets, fundamentally altering how value moves within economies.
These were highlighted at the Tokenization Manila | 2024 event held on May 29, 2024, at the PDAX office.
Panelists include:
- Nichel Gaba, PDAX CEO
- Tracy Li, Chinabank AVP – Emerging Technologies Lead
- Chris Verceles, XC Labs CEO
- Julian Kwan, InvestaX and IX Swap CEO
- Aaron Ong, IX Swap Co-Founder
Key points discussed:
- By leveraging blockchain technology, tokenization facilitates near-instant settlement of transactions, eliminating traditional delays and reducing costs associated with intermediaries.
- The KOLs noted that this innovation promotes a more liquid and accessible financial market, democratizing investment opportunities and enabling broader participation from the public.
Key quote:
“The way tokenization is transforming our financial services is that, first and foremost, it allows money to move faster than ever before. With that it can potentially create a market that is more liquid and more accessible by the general public.”
Tracy Li, AVP – Emerging Technologies Lead, Chinabank
Use cases of Tokenization:
Accelerated Transaction Speeds:
- Enables money to move faster than traditional banking methods
- Near-instant settlement transactions
Enhanced Market Liquidity and Accessibility:
- Creates a more liquid market
- Allows for easier exchange and transfer of tokenized assets
Composability:
- Tokens can represent various assets such as real estate or securities
- Allows these tokens to be combined or stacked
- Provides flexibility and allows creation of new financial products or services
Unlocking Trapped Value:
- May unlock value from assets that are traditionally illiquid or difficult to exchange
- Enables easier trading of assets, potentially releasing capital for reinvestment and economic growth
Democratization of Investment Opportunities:
- Makes investment opportunities more accessible to a broader range of investors
- Enables fractional ownership and lower entry barriers
- Allows more individuals to participate in investment markets globally
However: The panel emphasized that these opportunities also come with risks.
Scams and Security:
- Retail investors are prone to scams in tokenized assets
- Public chain platforms are vulnerable to hacks
Economic and Market Risks:
- DeFi participation introduces economic risks like temporary loss in liquidity pools
Information and Regulatory Challenges:
- DeFi lacks regulatory oversight and investor protections
- Access to comprehensive information like audited financials is limited
Important note:
- Choosing licensed platforms with robust security measures and compliant practices is vital.
- Conducting thorough due diligence on platform operations and regulatory compliance is necessary to mitigate risks.
What to watch: Future developments may expand the application of tokenization beyond financial assets, potentially revolutionizing sectors like real estate, art, and intellectual property.
Go deeper: Real World Assets (RWA) tokenization is an emerging blockchain use case focused on digitizing physical assets like real estate and commodities.
- This process enables transparency in asset valuation and fractional ownership, while also allowing tokenized assets to serve as collateral in decentralized finance (DeFi) protocols.
- RWA projects may offer potential airdrops as incentives for engagement with their platforms.
This article is published on BitPinas: IX Swap Meetup Recap: RWA Tokenization May Transform Finance
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