Tokenization Will Transform Infrastructure and Markets: Bank of America | CoinDesk JAPAN | CoinDesk Japan

Tokenization is just one application of blockchain technology, but it has the potential to transform financial and non-financial infrastructure and financial markets in the next 5-15 years, Bank of America said. 29, in a research report.

“We are on the verge of an evolution of infrastructure that may reshape how value is transferred, settled and stored in every industry.”

Tokenization is the process by which real-world assets (or Real World Assets: RWA) are converted into blockchain-based tokens.

“Tokenizing traditional assets and issuing assets in tokenized form will increase efficiencies across the asset lifecycle, reduce costs, improve the efficient allocation of capital, optimize global supply chains, It could power a generation of SaaS (software as a service) companies and ultimately drive mainstream adoption.”

Bank of America said it took 30 years for disruptive technologies like radio, television and email to reach the mainstream. For digital assets, on the other hand, we expect a shorter period.

The bank said that the adoption of blockchain technology is accelerating among financial institutions and companies “because of the increased opportunity cost of not achieving efficiency,” i.e. the pursuit of efficiency.

“Distributed ledger technology and tokenized traditional assets are not ‘crypto assets,'” the report points out. but we expect 99% of those that exist today to virtually disappear in the next decade.”

Memecoins like Shiba Inu Coin (SHIB) and Pepecoin (PEPE) have received a lot of attention “despite having no utility or intrinsic value,” but “other tokens are different.”

Public permissionless blockchains, including Bitcoin, Ethereum and some third generation blockchains, are decentralized and require tokens to reward participants for processing transactions on the network. The report states:

｜Translation: CoinDesk JAPAN
｜Editing: Takayuki Masuda
| Image: Pixabay
｜Original: Tokenization Is Likely to Transform Infrastructure and Financial Markets: Bank of America