Tokenisation is an innovative technology that is revolutionizing the business world, empowering the digital transformation of companies, and radically changing the way people invest their money.
According to the Tokenization Market report, in 2020 B2B companies adopting tokenization invested $1.9 trillion, while by 2025 an investment of $4.8 trillion is expected.
But what is tokenization, what applications does it have in companies and what advantages does it offer? In this article, we tell you.
What is tokenization?
Tokenisation is the digital representation of a tangible or intangible asset, through Blockchain technology.
Although the term tokenization is directly associated with virtual currencies or cryptocurrencies (Bitcoin, Ether, etc.), the truth is that its application is broader and companies, debts, works of art, or real estate, among others, can also be tokenized.
Being based on Blockchain allows it to benefit from the characteristics of the technology, such as decentralization, distribution, or immutability, thus allowing:
- Increase security in transactions.
- Reducing costs and increasing efficiency by not needing intermediaries.
- Greater transparency due to digital traceability.
- An expansion of the market.
Application in enterprises
Enterprise tokenization is still under development but is already being used for a variety of purposes such as:
- Managing business models.
- Offering greater interaction to users with products, thus achieving customer loyalty.
- Obtain financing through virtual tokens or new cryptocurrencies. These are known as ICOs or Initial Coin Offerings.
- Trade exclusively digital goods (videos, photographs, works of art).
- Trade debts, and thus avoid paying creditors.
Tokenisation offers companies numerous advantages, including the following:
- Improves corporate reputation, by using one of the most innovative technologies on the market, it shows a more attractive and updated image of the company.
- It improves communication between administrators and partners.
- Simplifies management and offers security, thanks to digital traceability.
- Increases transparency, generating greater confidence among partners and investors.
- Boosts success and increases visibility.
- It offers security, as all the information recorded in the Blockchain chain cannot be manipulated.
For all these reasons, the importance of the tokenization of companies is clear, as it can provide great competitive advantages in the creation of businesses.
At Navas Cusi lawyers we are experts in tokenization, and we offer legal coverage in all activities that can be carried out at a business and private level.