Blockchain technology is catching the eye of many financial institutions. It has the potential to change how finance works. Tokenization could boost efficiency and lead to new financial products. Big names like BlackRock and PayPal are diving into blockchain, hinting at a major shift in the industry.
In a recent chat before the Benzinga Future of Digital Assets event, Sandra Ro, CEO of the Global Blockchain Business Council, shared her thoughts on why institutions are interested in blockchain and what it means for the cryptocurrency world.
Tokenization: A Fresh Approach to Finance
Ro pointed out that some institutions might be exploring blockchain simply because they fear missing out. Others, however, see a chance to create new revenue by tokenizing real-world assets. This includes things like collateral, money market funds, and repos. With tokenized assets, you can own a fraction of something or transfer ownership digitally without moving physical items like gold. Ro explained that these assets can “improve capital efficiency, liquidity, and reduce frictions and potentially costs.” This makes managing assets and transactions simpler.
Rethinking Financial Products
Despite the buzz around Bitcoin and Ethereum ETFs, Ro believes they’re just repackaged versions of existing products. She has worked on regulated Bitcoin products before and noted that “they are NOT new innovations.” ETFs and futures are traditional structures at their core. Ro thinks the real change will come when decentralized finance (DeFi) and centralized finance (CeFi) team up to create “scalable, hyper-customizable financial products with embedded cash/payment legs.”
A Future Built on Blockchain
Ro envisions a future where all financial products are issued and settled on the blockchain. This would create a smoother financial environment. She believes that merging DeFi with CeFi could lead to a more efficient system where transactions happen seamlessly on-chain. Ro is optimistic about a “world of financial innovation” that’s still waiting to unfold as blockchain reshapes how we manage and move assets.
As the Benzinga Future of Digital Assets event approaches, discussions will likely explore blockchain’s role in traditional finance. Tokenization is gaining traction and changing the possibilities for financial products. Ro’s insights suggest that blockchain has a lot more to offer as it evolves beyond its current applications, enabling flexible and customized solutions for the finance sector.
As the digital asset market matures, the interplay of regulatory changes, mergers and acquisitions, and adoption trends will shape the future of this dynamic field. The Benzinga Future of Digital Assets event in New York City on November 19 will provide a platform for industry leaders and investors to delve into these developments, offering valuable insights into the evolving regulatory environment and the latest market dynamics.