Blurring Lines Between Payments and Investments: The Future of Tokenization
Summary:
Rob Durscki, the Stellar Development Foundation's tokenization director, suggests that the distinction between payment and investment assets is increasingly merging, hinting at a future where paying with fractions of tokenized funds is possible. Bradley Chase, Ripple's VP of engineering, adds that more businesses are interested in accepting stablecoin payments and owning tokens as additional revenue sources. Currently, over $1 billion in U.S. Treasurys has been tokenized, with projections for the tokenized market to reach $16 trillion in the coming years.
The distinction between means of payment and investment assets is progressively melding together. A future scenario might include splitting a meal bill and paying using fractions of tokenized funds, made feasible through asset tokenization. Rob Durscki, the Stellar Development Foundation's chief of tokenization, shared this futuristic prognostic during the TokenizeThis 2024 Miami event on May 9. Durscki cited that bridging the gap between payments and investments will introduce new capabilities for financial commodities. According to Durscki, organizations such as Franklin Templeton, WisdomTree, and multitude others issuing this fresh wave of on-chain assets desire not just to yield profits, but also aspire to conveniently integrate them as payment instruments.
Tokenization is a process involving the conversion of asset ownership or rights, such as property or shares, into a digital token on a blockchain. This catalyzes a digital reproduction of the asset, facilitating fractional ownership, enhancing liquidity and simplifying access to certain monetary products for smaller investors.
Durscki elaborated on the subject: “No hindrance exists in us splitting a dinner bill, and me paying with Franklin Temple funds as I can transmit $20 in about 3.6 seconds via Stellar. You stand to earn a yearly 5-6% interest on that dinner. Thus, a positive convolution exists between investment and payment as it's ultimately about value. We are facilitating the transaction of value.”
Bradley Chase, Ripple's engineering top brass, too voiced his insights during the panel discussion, speaking about emerging customization patterns from enterprises. According to Chase, a growing number of businesses are showing interest in accepting stablecoin payments and owning on-chain tokens as an additional revenue source.
Chase explained: "These business clients now have their own consumers who are keen on paying in stablecoins and they want to hold those stablecoins. So that’s somewhat the simplest entry and exit gateway for them into this sector.”
In excess of $1 billion in U.S Treasurys has been tokenized on Ethereum, Stellar, and other blockchain platforms. As per a recent Ripple estimate, the tokenized market is projected to hit the $16 trillion mark in the years ahead, a number that dwarfs the total crypto sector market cap by a factor of eight.
Published At
5/9/2024 8:25:00 PM
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