Securitize CEO Reveals How Tokenisation Cracks the Code on Illiquid Assets

Forget waiting years to cash out. The future of private equity, real estate, and fine art isn't on a spreadsheet—it's on a blockchain.

Securitize's CEO just laid out the playbook for turning frozen capital into liquid digital assets. The pitch? A radical shift from paper certificates to programmable tokens that trade 24/7.

The Liquidity Lock-Up

Traditional illiquid assets are a nightmare of paperwork, middlemen, and multi-year lockups. Investors get trapped. Value sits idle. The system, frankly, is built for patience—or masochism.

Enter the Digital Twin

Tokenisation doesn't just digitize an asset; it re-engineers its DNA. Each token becomes a programmable slice of ownership. Smart contracts automate compliance, distributions, and trades. Suddenly, a share of a skyscraper can move as easily as an email.

Bypassing the Old Guard

The real magic happens off the traditional rails. Tokenised assets cut out layers of custodians, transfer agents, and brokers. Settlement drops from days to seconds. It's a direct challenge to the fee-heavy machinery that's propped up private markets for decades—a system that often confuses complexity with sophistication.

This isn't just an upgrade. It's a liquidation of the old, inefficient way of doing business. The race is on to see which legacy gatekeepers adapt and which get left holding empty paper bags.

Tokenisation is seen by many as a key to democratizing ownership of high-value assets, yet doubts linger about its effectiveness in revolutionizing asset liquidity. Securitize CEO Carlos Domingo offers a reality check, drawing from his extensive experience in the sector. While tokenisation lowers the entry barriers to asset ownership, experts suggest it doesn’t ensure ease of sale for these assets. Insights from industry leaders reveal a blend of enthusiasm and caution towards this technology.

How Effective is Tokenisation?

Tokenisation allows real-world assets to inhabit the digital realm, promising increased accessibility. According to Securitize’s Domingo, this technological advance has not necessarily simplified liquidity. He discussed this during an interview, highlighting that early experiments reveal the limitations of tokenisation. Illiquid assets remain tough to trade swiftly, even when tokenised.

“Providing liquidity to the asset class is as important as providing accessibility,” Domingo stated, underlining the market profile of assets.

What Makes Stablecoins Stand Out?

Stablecoins appear to have successfully employed tokenisation by leveraging existing highly liquid assets. Companies have been shifting focus towards liquid assets like cash due to these practical constraints. Domingo identifies stablecoins as the “most successful” implementation of tokenisation, attributing their success to the pre-existing liquidity of the assets they represent.

“That didn’t happen, because an illiquid asset is illiquid whether you tokenize it or not,” Domingo noted, referring to investor assumptions.

The investor community and regulatory bodies are keenly interested in the future of tokenisation. During a recent SEC meeting, discussions involving crypto leaders and Wall Street executives explored strategies to address industry needs. Establishing robust regulatory frameworks for tokenisation remains a priority.

Reports echo Optimism about the future, albeit tempered with caution. A recent analysis by Standard Chartered forecasts tokenised assets to surge significantly by 2028, realizing substantial economic potential. Amid diverse opinions, industry leaders collaboratively work towards success in this evolving field.

The outlook for tokenisation features both promise and pitfalls. While it opens avenues for investment in previously unreachable assets, liquidity concerns persist. As stakeholders strategize to align with innovative trends, navigating regulatory landscapes will determine how effectively the digital and physical asset worlds merge.