It feels like just a few days ago I wrote about tokenized assets. Mainly in the real estate markets but there's really no reason why many other assets couldn't be tokenized and it seems like HSBC agrees.
It also feels like much of what is being targeted lately is Institutional investors. So if you yourself are not at that threshold yet I would highly recommend doing whatever you can to get to that point as it opens up a whole new world of possibilities (yes, it's no easy task to get there)
HSBC Orion
HSBC is set to launch a custody service in 2024 which is a London based banking platform. This new custody service will be issuing digital assets. Now it's important to note that none of this will be tied to crypto and is just an expansion of blockchain and all the things blockchain is capable of doing a marvel of innovation in itself.
These assets are set to be tings like tokenized physical gold. As gold is expensive to move from one place to another. Instead offering up tokenized assets means trading of buying and selling a large expensive physical asset like gold no longer has to be transported from one person to another and instead is represented by gold held in a volt which might get tapped into ship every once in a while instead of all the time.
Tokenized Representing
This really seems to be an increasing demand by institutional investors. The ability to now buy, trade and hold massive amounts of assets but in digital form for swapping and trading.
Take for instants that someone has a art piece that's worth $100,000 but if person A bought it from person B they would also have to transport the cost of getting it from point A to point B. Instead 3rd party systems are designed to register and house the artwork or other assets in a secure building and allow for trading without the art piece ever moving. Of course if the owner should want it they can request it from the building it is being housed in. But this eliminates a lot of extra moves that could happen as the artwork moves through many hands.
This partnership with HSBC seems to be centered around the Ripple owned tech firm Metaco.
This tokenization of assets is becoming more common place and it wont be long before we start to see it standardized across everything. Some of the most common that are gain popularity at the moment are.
- Gold and Silver or other precious metals
- Real Estate
- Stocks
- Bonds
- Treasury Bonds
We are also starting to see this in the form of other crypto projects as well. This is outside of the scope of HSBC but DeFi platforms have already adopted the ability to stake Ethereum tokens and get an asset token which can be swapped and moved between liquidity pools are a low to zero fee move which is making it a little more even of a playing field for everyone instead of paying $10+ just to open up a liquidity pool and dump a few ETH in it.
The only issue with this process is you are fully trusting the platform or person to be holding those assets in exchange for the digital representation. This is where transparency and open blockchain is going to be critical for people to understand and get used to. It shouldn't just be assumed that a person or company is in your good faith.
It's clear however that tokenization is only going to become more common place where banks or companies hold these core assets and the digital world trades them.
Posted Using InLeo Alpha
