Security Tokenization

How to unlock hidden value by moving stocks, bonds, and funds on the blockchain
Matthias Tewes | Marius Bauer | Gabriel Holz
7月 2023 | Strategy Paper | 英语

Security Tokenization

How to unlock hidden value by moving stocks, bonds, and funds on the blockchain

Cryptocurrencies have been making a lot of noise since the two explosive rises in Bitcoin market capitalizations, at times overtaking the market capitalization of giants like Amazon, Saudi Aramco, or Alphabet. However, amidst overlapping global economic and crises, it took heavy, overproportionate losses. Despite recent price recoveries, this poses the question whether market participants are witnessing the failure of the underlying distributed ledger technology (DLT) or rather the dissolution of yet another gold rush. 

This paper analyzes the major disruption potential for security tokens, as they represent traditional financial assets such as bonds, funds, and stocks that have been moved on the blockchain, thereby unlocking hidden value. 

15 years

For the first time in 15 years, security tokens have the potential to reduce the regulatory burden, resulting in significant simplifications along the E2E value chain.

35 – 50%

The cost savings in the processing of tokenized securities can amount to 35 – 50 percent.

4

key takeaways are essential in order to unlock hidden value. 

Management Summary
  • The underlying DLT of cryptocurrencies holds a disruptive potential and offers promising new value propositions for participants in financial markets.
  • Simply ignoring DLT is not an option – companies must develop a holistic digital assets strategy, including the alignment of the operating model as well as possible effects on risk management
  • It is crucial to develop a target picture, including the ambition level for digital assets as well as the role digital assets can possibly play regarding the company´s business model.
  • Financial institutions must act now and actively formulate entry strategies and evolve along the digital asset learning curve in order to stay competitive.

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