Original author: Heart

Original translation: Plain Language Blockchain

In recent years, the financial world has undergone a revolutionary change brought about by the tokenization of real-world assets. This innovative way of representing and trading real-world assets on blockchain platforms is gaining attention worldwide, and many countries are actively promoting and regulating this technology. When we delve into the current status and future possibilities of real-world asset tokenization, it is not difficult to find that we are on the verge of a financial revolution that may completely change the way we understand and interact with assets.

1. The global landscape of real-world asset tokenization

Multiple countries are leading the application and regulation of real-world asset tokenization, each using unique methods and showing varying degrees of enthusiasm:

1) Singapore: Pioneer in real-world asset tokenization

Singapore has become a leader in the field of real-world asset tokenization. The Monetary Authority of Singapore (MAS) actively promotes and regulates tokenized securities through its Fintech Regulatory Sandbox. The launch of Project Guardian, a collaboration with the financial industry, further demonstrates Singapore’s strong commitment to exploring the economic potential and value-added applications of asset tokenization.

2) Switzerland: Building a comprehensive legal framework

Switzerland has taken a proactive approach and provided a comprehensive legal framework for the trading rights of tokenized securities through the Blockchain Act. The Swiss Financial Market Supervisory Authority (FINMA) is supportive of tokenized securities and provides clear guidance for their issuance, making Switzerland an ideal place for blockchain and tokenization projects.

3) The United States: A decentralized regulatory model across states

Although the United States has not yet established a federal framework for the tokenization of real assets, some states have taken the lead. Take Wyoming as an example. The state has passed a number of laws to build a regulatory framework for digital assets including tokenized securities. This state-level model provides room for innovative experimentation and may also lay the foundation for a more nuanced federal framework in the future.

4) EU: Markets in Crypto-Assets Regulation (MiCA)

The EU is developing the Markets in Crypto-Assets Regulation (MiCA), which aims to provide a comprehensive framework for digital assets, including tokenized securities. Although the regulation does not specifically target the tokenization of real assets, it is expected to have a significant impact on the tokenization space across Europe and may set standards for other regions.

5) Japan: Revising existing laws

The Financial Services Agency (FSA) of Japan is developing regulations to allow the issuance of tokenized securities. By revising the Financial Instruments and Exchange Act to include security tokens, Japan is adapting its existing legal framework to accommodate this emerging technology.

6) UAE: Embracing blockchain and tokenization

The UAE, especially Dubai, is actively promoting the application of blockchain technology and tokenization. The Dubai Financial Services Authority (DFSA) has launched a regulatory framework for digital assets including tokenized securities, positioning the UAE as a hub for blockchain innovation in the Middle East.

7) Hong Kong: Developing a comprehensive framework

The Securities and Futures Commission (SFC) of Hong Kong has issued guidelines on the issuance of security tokens and is working on developing a comprehensive regulatory framework for virtual assets, including tokenized securities. The move demonstrates Hong Kong’s commitment to maintaining its position as a major financial center in the digital age.

8) Nigeria: Tokenization of Real Estate

The Lagos State Government in Nigeria has proposed an innovative plan to tokenize real estate, aiming to use blockchain technology to improve the transparency, efficiency and ease of transfer of real estate transactions, a move that is expected to increase the state’s endogenous revenue.

2. The Future of Tokenization of Real Assets: Expanding into New Areas

As the tokenization of real assets continues to accelerate, it is expected to involve all aspects of the economy and society. The following are some areas that the government may consider adopting in the future:

1) Infrastructure Financing

The government can explore the tokenization of infrastructure projects to achieve more efficient financing and management of public works. This may make infrastructure investment more popular and allow small investors to participate in large projects.

2) Public Services

Tokenization can be applied to various public services, such as healthcare and education. For example, tokenized healthcare credits can be used to more efficiently manage and trade healthcare benefits.

3) Energy and Environmental Assets

Tokenization of renewable energy credits or carbon offsets can create a more liquid market for these environmental assets, thereby accelerating the transition to sustainable energy.

4) Intellectual Property

Governments may consider developing a framework for tokenizing intellectual property to make it easier to trade and manage patents, copyrights, and trademarks in the digital realm.

5) Government Bonds and Securities

Tokenizing government bonds and securities could increase their accessibility to a wider range of investors and potentially reduce the costs associated with issuance and trading.

6) Land and Property Registry

Following Nigeria’s example, other governments may also explore tokenizing land and property registries to increase transparency, reduce fraud, and streamline property transactions.

7) Digital Identity

While digital identity is not an asset in the traditional sense, it can be tokenized to provide secure, portable, and user-controlled authentication for a variety of government and private sector services.

8) Cultural and historical assets

Tokenization can be used to divide the ownership of cultural and historical assets, allowing a wider range of the public to participate in their protection and appreciation.

9) Pension and social security systems

Governments may consider tokenizing pensions and social security benefits to create a more flexible and portable system for citizens.

10) Public transportation

Tokenized transportation points can be used to create a more efficient and flexible public transportation system, and even have the potential to integrate multiple modes of transportation and achieve convenient management through an easily tradable token.

3. Outlook for the future

The global application of real-world asset tokenization is accelerating, and countries are gradually realizing that it can not only transform the financial sector, but also expand to a wider range of application scenarios. From Singapore’s proactive initiatives to Nigeria’s innovative real estate tokenization program, governments are exploring ways to integrate this technology into their financial and regulatory frameworks.

Looking ahead, the potential applications for real-world asset tokenization are nearly endless. From infrastructure financing to environmental assets, from intellectual property to public services, tokenization has the potential to reshape the way we understand, manage, and trade all types of assets.

However, as with any transformative technology, the road ahead is not without challenges. Governments and regulators will need to adapt to develop frameworks that promote innovation while protecting consumer rights and financial stability. The global landscape for real-world asset tokenization is still evolving, and it will be interesting to see how different countries navigate this new frontier.

What is certain is that the tokenization of real assets is no longer a distant concept, but a reality that is rapidly reshaping the global financial landscape. As more and more countries adopt and explore the potential applications of this technology, a more interconnected, efficient and inclusive financial world is gradually emerging. The tokenization revolution has arrived and is setting off a global wave.

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