Introduction Tokenization

Tokenized Fiat Currencies Are on the Horizon. We believed that the major reserve and trade currencies of the world, would become digital currencies. Today we see sovereign currencies being tokenized, and we realize that global money tokens are on the horizon.

The world is headed toward a system of cheap, instant monetary transactions with traditional, fiat money — regardless of which countries happen to launch digital fiat money. Moreover, this will be a radical change in the way that payment systems, the monetary system and economic interactions at large will work. Global money tokens, backed by baskets of reserve currencies, will emerge and become the preferred  monetary model.

There are some detrimental factors preventing immediate progress, including issues such as nationalism and trade conflicts.

Many countries are already on the blockchain bandwagon; however there is no global consensus yet, if any individual project is implemented, it would mark a local tokenized fiat currency and a local blockchain-based payments system.

Our project’s goal, is to create a tokenized blockchain-based solution to global economy, targeting global M0 money supply.

What is “Asset Tokenization”?

Our world is full of untapped real-world assets. From private equity, real estate, gold reserves, fine art to agriculture, tangible items have been difficult to subdivide or physically transfer. Investors have manually traded these assets on paper, often through layers of intermediaries, which is slow, complicated and expensive. These trades are also more difficult to track due to the regulatory nature of paper transactions, especially when it involves cross-border legislation.

Asset tokenization is the process of converting ownership rights in a particular asset into a digital token on a blockchain. These can include unique hash values which represent physical assets, financial instruments, real estate, equity, bonds, fund units, etc…

Tokenization of real-world assets will enable new markets by decreasing barriers and frictions to information exchange and trade.

By switching to a digital token system, asset owners and investors can create new efficiencies like making assets more liquid by automating what was previously a cumbersome, manual process — while retaining the real-world characteristics of the underlying asset itself.

Even in its earliest stages, blockchain technology is disrupting how people are envisioning business and transactions. Cryptographic tokens and blockchain-based economics are leading as the most common models being implemented by the technology. Tokens are digital representations of assets. Native cryptocurrencies, such as Bitcoin or Ether, are tokens.

However, modern blockchain-based applications usually implement their own tokens on top of blockchains, in the form of extended application logic or smart contracts. This higher-level abstraction provides more control over the token’s key parameters and functionalities and allows for additional business logic to be incorporated.

Fungible vs. Non-fungible Assets

There are two types of assets that can be represented as blockchain tokens: Fungible assets and non-fungible assets. Fungible assets are interchangeable, meaning each unit of the asset is exactly the same holding the same value.

For example, a unit of fiat currency like the US dollar is a fungible asset. All units of one dollar bills are exactly the same, holding the same value and being interchangeable. Fungible assets can also be divisible, in the example of the dollar, it can be divided into cents.

However, non-fungible assets are unique and not necessarily interchangeable. For example, a gold bar is typically unique. It is distinguished by its weight, purity, and even serialization. Every bar of gold might have a differing value and they are not usually divisible as a native, real-work.

Fungible and non-fungible assets can be represented digitally by a token on blockchain.

Fungible tokens are simple numbers associated with units of account. Transfers of a certain number of tokens between accounts represent value transfers. Blockchain-based platforms tend to use fungible tokens to implement tokenized economies.

However, non-fungible tokens are also viable — usually in combination with fungible tokens representing pricing. Non-fungible tokens require more data to be stored to identify each individual unit, the management of this type of token is usually more complex.

Benefits of Asset Tokenization

The ability to represent the ownership of real world assets on a blockchain can disrupt the way we manage assets.

Presently, high-value investments are not accessible by a large percentage of the global population. New models of capital formation secured by distributed ledger blockchain technology represents an evolution to global capital markets and capital mobility.

  • no territorial barriers: an investor from anywhere globally can invest in things across the world. For example, an investor in California might be able to invest in an office building in Argentina — all with the security, speed and ease of transfer of the blockchain network.
  • no intermediaries: trade can be conducted without third-party brokers that often slow the process, making it inefficient and more expensive while adding the risk of additional error in any transaction.
  • lower investment risk: any particular investment portfolio can become more diverse due to the potential of incremental ownership of a variety of assets.
  • improved liquidity of tangible assets: blockchain tokens enable to introduce fractional ownership.

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