By Andrew Thomson
September 19, 2019
Tokenization of assets is the concept of using blockchain technology to securitize assets. It is the process of issuing a blockchain token that digitally represents a real tradeable asset. The issued “security tokens” are created through a type of initial coin offering – or in this case – security token offering (STO). They can either represent regulated financial instruments (equities, bonds, loans, and funds), tangible assets (real estate, artworks, precious metals), or intellectual property (copyright to works of authorship).
The benefits of tokenization include increased liquidity, faster settlement, lower costs and bolstered risk management. Even private securities or illiquid assets such as fine art can be tokenized and traded on the secondary market. This means that a much larger audience of investors can access them. But what’s more, with high divisibility, investors can purchase tokens that represent only a small percentage of the asset.
Coming together in a “token economy”, these benefits are designed to bring a more efficient and fairer financial world that reduces the traditional barriers to creating, buying, and selling securities. Which companies are working towards this brand new financial system that is more transparent, efficient, and inclusive? We’ve picked out 10 of the highest ranked companies that we track in this space:
Harbor is a blockchain-based digital investment platform for alternative assets. Apart from maintaining transfers, records, and ownership of private securities, it brings investors various benefits. It streamlines onboarding and subscription processing, simplifies investor communications, and unlocks enhanced liquidity options. Since 2017, when it was founded, the company has become a powerful player due to its easy-to-use software and greater flexibility connected to increased liquidity. Harbor has managed to raise over $40 million and is backed by a variety of major investors.
Tokeny Solutions is a Luxembourg-based fintech company. In contrast to the analog nature of capital markets, it advocates for a new system of easy digitization of financial assets. The company’s platform allows for issuance and service management of tokenized securities: It allows investment banks, funds, and mid-cap companies and distributors to digitize their process to enforce global compliance obligations, enable automation, and drive efficiency.
Templum, a New York-based company founded in 2017, sees itself as a transformative force in the current financial markets. Its flagship broker-dealer subsidiary, Templum Markets, is a blockchain-enabled regulated marketplace for the primary sale and secondary trading of digital assets. The company has sealed several powerful partnerships, including those with IPWe or Miami International Holdings.
Masterworks is a unique investment platform for fine art founded in 2017. It allows investors to purchase interests (or fractional shares) in a painting, just like you can buy a share in a company. This way, Masterworks seeks to open the art market – instead of allowing historical treasures to be hidden in private collections – with investors being able to buy shares for as little as $20. That way, virtually anyone can own shares of masterpieces painted by Picasso, Monet, and Warhol.
Bitmark is a global company founded in 2014. It seeks to define digital property, defend it, and make it economically divisible. It argues that while societies have developed property and intellectual property rights, they failed to protect digital assets. That’s why Bitmark enables ownership, licensing, and peer-to-peer transfers of digital assets of value, including health data, digital art collectibles, music rights, and medical records.
Mattereum is a provider of legally-enforceable smart contracts. Founded in 2017, the company advances a powerful combination of software and the reliability of law. That’s why it establishes itself as a valuable player in the field of digital trade.
Its protocol enables a variety of financial activities, ranging from trading of interests of specific assets to securing contracts to reduce risks in unreliable jurisdictions. The company has also developed the Mattereum Smart Property Register – an open-source and decentralized solution for digital control of real-world assets.
Parallel Markets has developed software that enables partners in funds and companies to seamlessly transact in traditionally illiquid assets by tokenizing them. This way it declares war against the traditionally opaque ecosystem of private assets with slow and ambiguous transactions. The company has developed an easy interface for companies to view holdings, transmit important updates, and buy or sell shares in a regulatory compliant way.
FinFabrik is a Hong Kong-based fintech company founded in 2016. It connects asset owners and investors to boost access to investment opportunities. Through its blockchain-powered platform, the company is transforming traditionally alternative, illiquid assets into Digital Asset-Backed Securities (DABS).
For example, the company has recently partnered with Lumiere, to carry out the first-ever tokenization of a direct investment in a movie. The piece, called Papicha, is a progressive film directed by Mounia Meddour. Through digitization of their equity, the investors are able to transfer or sell their participation in the future to any other investors interested in this alternative asset.
Founded in 2013, AlphaPoint is a New York-based company that helps make illiquid assets liquid. It enables customers to launch new products and services by providing solutions to digitize assets, launch markets, and reduce operational costs. It works with a variety of capital market stakeholders, including asset managers, institutional traders, fund or asset owners, family offices, software companies, and other organizations in the digital asset ecosystem.
PO8 is a tech company creating scalable blockchain solutions for marine archeology conservation and investment. It utilizes blockchain, artificial intelligence, and robotics to recover and tokenize a unique set of underwater cultural heritage assets and reshape their ownership by digitizing them as NFTs (non-fungible tokens), with a stored value of the underlying asset.
PO8 gained international recognition by becoming the first company in 18 years to receive a marine salvage license in The Bahamas, which is why it’s one of the global leaders of conservation finance.
Whether you want to purchase a share or interest in a company, real estate, artwork or a movie, there’s already a diverse range of companies working towards making the process easier. We believe these innovators are certainly ones to look out for in the future.
If you want to find out more about the companies innovating in the tokenization of assets, go ahead and search our database. You can also explore other industries there too, or alternatively you may like to find out about our company scouting services.
To read the original article, click here.