Alternative Market Briefing

Tokenisation - Reshaping the Future of Financial Markets

Tuesday, October 22, 2024

Matthias Knab, Opalesque for New Managers:

In a groundbreaking report released today, the Bank for International Settlements (BIS) and the Committee on Payments and Market Infrastructures (CPMI) have shed light on the transformative potential of tokenisation in financial markets. The report, commissioned by the Brazilian G20 Presidency, offers a comprehensive examination of how tokenisation could revolutionize the way money and other assets are handled in the global financial system.

What is Tokenisation?

The 36 page report defines tokenisation as "the process of generating and recording a digital representation of traditional assets on a programmable platform." This process creates digital tokens that represent real or financial assets, enabling them to be traded and settled on shared digital platforms.

The Promise of Token Arrangements

Token arrangements, which are infrastructures supporting the use of digital tokens in financial transactions, offer several potential benefits:

Multi-asset, multi-function capabilities: These arrangements can host different types of assets in token form, including money and other financial instruments, on a single platform.

Increased efficiency: By integrating multiple financial market functions onto one platform, token arrangements could streamline processes from issuanc......................

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