Jeremy Allaire, CEO of circle payment startup, believes that in 2-3 years, asset tokenization will become much more popular and accepted around the world.
During the world economic forum (WEF) held in Davos, Ellyr together with the Director of digital currencies at MIT Media Lab Neha Narula discussed how tokenization can make assets more liquid and accessible. At the same time, this method of increasing liquidity will not bring new systemic risks.
Tokenization of assets can make, for example, real estate or corporate securities more liquid by trading in secondary markets. However, as Narula noted, the use of tokens can be associated with a number of different problems and risks, which means that certain standards need to be developed.
“Consumer protection is necessary, as well as standards to preserve market integrity. People who issue tokens must provide information about what exactly these assets represent. We want to make sure that these tokens are really linked to assets in the real world, ” Narula stressed.
In the future, according to Ellair, tokenization will be possible not only for existing assets, but also for future profits. That is, for example, a farmer from India will be able to get funds for future profits. However, this requires that they are familiar with the technology and use stablecoins. It’s too early to talk about it now, but in 2-3 years such opportunities will become more popular.
Ellair also expressed the opinion that in 5-10 years “the world of large capital will be more similar to what we see in the field of e-Commerce”. Narula supported the interlocutor, saying that during this period we will see a lot of different experiments, some of which may “fail cruelly”, but there will also be projects “that are really not enough”.
In August last year, Jeremy Ellyre claimed that bitcoin attracts investors as a safe asset. Then he stressed that the first cryptocurrency remains a popular means for hedging risks.