Replace Aug. 21, 2:23 p.m. UTC: This text has been up to date to incorporate a paragraph on Latin American stablecoin adoption.
Tokenization adoption could clear up a number of the systemic inefficiencies recognized in Latin American capital markets and speed up funding and capital circulation within the area, in keeping with Bitfinex Securities.
Systemic inefficiencies, together with excessive charges, complicated rules and structural points resembling technological limitations and excessive startup prices, are slowing funding and hindering capital circulation into Latin American capital markets, in a phenomenon dubbed “liquidity latency,” in keeping with the Bitfinex Securities Market Inclusion report, revealed on Thursday.
The area’s liquidity latency problem could also be solved by the adoption of real-world asset (RWA) tokenization, which refers to monetary and different tangible property minted on the immutable blockchain ledger, rising investor accessibility and buying and selling alternatives for these property.
Monetary merchandise tokenized on the blockchain introduce extra accessibility, transparency and effectivity, together with reducing issuance prices for capital raises by as much as 4% and reducing itemizing occasions by as much as 90 days, Bitfinex stated. The corporate stated tokenization may increase investor entry and create extra buying and selling alternatives.
“Tokenisation represents the primary real alternative in generations to rethink finance,” Jesse Knutson, head of operations at Bitfinex Securities, stated within the report. “It lowers prices, accelerates entry, and creates a extra direct connection between issuers and buyers.”
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Tokenization removes capital entry limitations for growing economies: Paolo Ardoino
Adopting tokenized monetary merchandise could open new capital entry alternatives for growing economies, in keeping with Paolo Ardoino, CEO of Tether and chief know-how officer of Bitfinex Securities.
“For many years, companies and people, significantly in rising economies and industries, have struggled to entry capital by way of legacy markets and organisations,” stated Ardoino.
“Tokenisation actively removes these limitations.”
He added that tokenized merchandise may unlock capital extra effectively and cost-effectively whereas giving buyers entry to higher-yielding merchandise backed by compliance and regulatory approvals.
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Bitfinex was the primary trade to obtain a digital asset service supplier license below El Salvador’s new Digital Property Issuance Legislation, which allowed the platform to problem and facilitate secondary buying and selling of tokenized property.
Tokenized US Treasury payments have been among the many first property tokenized by the platform, to allow “actually anybody to hedge their financial savings towards the world’s reserve foreign money.”
Among the world’s largest consulting corporations see tokenization as a multi-trillion-dollar alternative.
Tokenized securities alone could attain a possible $3 trillion market by 2030 within the bull case and $1.8 trillion within the base case, in keeping with predictions from McKinsey, cited within the Bitfinex report.
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