An executive from BlackRock estimates thatadoption of the tokenization by the institutional will take longer than expected. However, the effects of this tokenization on the ecosystem would be considerable.
La tokenization of traditional finance has been underway for several years now. Initiatives by major banks, including in France, bear witness to this. For example, CACEIS, Crédit Agricole’s post-trade subsidiary, recently registered PSAN.
How long can will it take to complete a transformation on such a scale? “Jean-Marc Stenger, CEO of Société générale FORGE, replied: “It’s very risky to make plans for the next 12 to 18 months in this environment.
Tokenization slower than expected in the short term
He did, however, note an acceleration in adoption. “It’s much faster than we anticipated,” he said. For Joseph ChalomHead of Strategic Partnerships at BlackRockInstitutional players are certainly making progress, but slowly.
Bitcoin ETFs are not the only news and focus for the global financial giant. The tokenization is of course also at the heart of its concerns.
And for his executive, speaking at a Financial Timethe tokenization may be slower than expected in the short term”.
It is, however, inevitable, and its effects are likely to be major. Tokenization, “in the long term (…) will play a key a monumental role in the evolution of our ecosystem “says Joseph Chalom.
Conditions for tokenization
According to the Boston Consulting Group, the market for tokenization of illiquid assetsincluding real estate and natural resources, could exceed 16,000 billion dollars by 2030.
These prospects will only be possible under certain conditions. This is what the BlackRock framework underlines.
We need to work with good players, and with a good, self-reinforcing infrastructure, then the money and adoption will come.” he quotes in particular.
BlackRock is involved in these developments. Chalom explains that the company is holding a number of discussions with players in both traditional and crypto finance. For example, the giant has forged a partnership with stablecoin issuer Circle.
DeFi puts identity management to the test
For its representative, the sector needs to regroup around certain assets and give the priority to real-life use cases. In Europe, priority is given to securitiesstarting with bonds. And the pilot scheme now allows for full-scale experimentation.
For decentralized finance, the head of BlackRock is more cautious about institutional adoption at scale, particularly for KYC and regulatory reasons.
However, he does not the long-term potential of DeFi. Smart contracts and large cash reserves are assets for institutional customers. But first we need to resolve the issue of digital identity, a major obstacle today.
Follow Corners.en on TwitterLinkedin, Facebook or Telegram so you don’t miss a thing.