Moody's, a prestigious credit rating and certification agency, has published a new report on asset tokenization, highlighting its potential to transform markets.
The report, titled “Digital economy – how tokenization is transforming assets and markets”, highlights how emerging technologies are being integrated into markets, completely transforming the way we access and interact with financial services.
The rating agency stressed that these new technologies, such as blockchain and digital assets, are Reshaping the financial industry as we know it, and they are building a new financial system that promises to be more efficient, transparent and secure.
Tokenization bridges the gap between traditional and digital financial industries
Blockchain technology has had a significant impact on the financial system and as we move forward in this development, the digital transformation of this sector becomes more evident.
As one of the most popular technologies in the finance industry today, Moody's has been exploring its benefits, applications and risks, in order to provide a broader view on this innovation, to understand its potential and provide insights into its adoption and continued growth.
As what he pointed The agency said tokenization “can reshape secondary markets” by making alternative assets easier to own and trade on exchanges.
The advantages of tokenization
On the advantages offered by tokenization, Moody's highlighted Liquidity and efficiencyAcross markets such as private equity, hedge funds, real estate and natural resources, this technology drives efficiency by reducing costs and simplifying processes.
The agency also noted that the digitization of assets on the blockchain improves accessibility to markets, such as hedge funds and private equity. This is due to the fractionalisation of investment amounts, which reduces minimum entry costs, lock-up periods and restrictions for investors. This, in many cases, translates into new opportunities for high net worth investors and even for retail investors.
On the other hand, according to Moody's, tokenization also favors Asset diversification for institutional and accredited investors, and enables a higher level of transparency and security by facilitating real-time access to tokenized assets on the chain.
Moody's also talks about Bitcoin ETFs
In addition to publishing a report on tokenization, Moody's also dedicated space to Bitcoin spot ETFs, which have caused quite a stir since their approval in the United States on January 10.
Regarding these cryptocurrency investment funds, the agency highlighted that investors are increasingly interested in participating in the Bitcoin ecosystem through these instruments, which provide familiarity and a regulated access route. It also noted that Bitcoin spot ETFs carry some risks, mainly due to the cryptocurrency's volatility.
As a rating agency, Moody's has also warned about potential risks to the crypto industry in general, such as security. However, it is approaching the digital transformation of finance in an objective manner.
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