Speaking at the Word Economic Forum in Davos yesterday Jeremy Allaire, Circle's CEO, argued that tokenization will become the rule in the management of financial assets within a maximum of three years; Neha Narula, director of the Digital Currency Initiative at the MIT Media Lab, participated in the discussion, agreeing that through tokenization, markets that are now characterized by illiquidity could be easily liquidated, reducing, rather than expanding, the systemic risks for the system financial.
However, Narula has kept to specify that in order to really reduce the risks it is necessary to proceed in the creation of a global standard at the normative level, declaring that:
We want to have consumer protection, we want to have market integrity. People who issue assets should disclose information on what exactly those assets represent. And we want to make sure that these resources are really related to their representation in the real world.
Among the various examples cited of how tokenization could bring benefits to all the actors involved in the process, the Circle CEO cited the case of a farmer who proceeded with the tokenization of his crop; however Allaire also admitted that such a vision is still a long way from materializing.
In order for such a scenario to take place, in fact, the hypothetical farmer must be able to accept and use a stablecoin, which, in the current state of affairs, would mean taking on a whole series of both regulatory and technical problems of which, currently, it is unthinkable to take charge.
However, it remains objective that tokenization is one of the most revolutionary phenomena among which blockchain technology has given birth and more and more people are convinced that it is only a matter of time before this trend takes hold and becomes mainstream; for now, as we have explained in numerous articles, we still remain anchored to the testing phase, with numerous projects that have been launched around the world, especially in the real estate sector, which however still need time to prove their validity.