The first tokenisation happened in 2017. But even now, six years later, digital assets have failed to fully take off. An article by McKinsey & Company, however, claims that the recent surge of interest in blockchain might lead to a different outcome for the sector this time, due to stronger business fundamentals structural changes.
Despite some high-profile cases of bankruptcies, fraud, and regulatory breaches in the past year, institutional interest in tokenisation remains high. The article cites estimates that up to USD5 trillion in tokenised digital securities could be issued by 2030. At-scale examples already exist today: US-based fintech infrastructure firm Broadridge currently “facilitates over USD1 trillion worth of tokenised repurchase agreements monthly on its Distributed Ledger Repo (DLR) platform”. In the financial services sector, “emphasis is shifting to the reemergence of a ‘blockchain, not crypto’ narrative”.
Time for change
The article suggests that “tokenisation may be at an inflection point”. Some developments that hint at this include advances that have been made in cash tokenisation, emerging regulatory frameworks around the world, and increasing market readiness and infrastructure maturity.
It concludes with some suggestions for firms that wish to hop on the bandwagon. Building out tech and risk capabilities; forming ecosystem relationships, especially for asset distribution; and participating in standard setting are all actions that could help a firm gain a “leading position in this ecosystem”.