Only 3 Years Left!? – Tokenization Won’t Wait

Hello again – it’s Friday once again, the best time to delve into the exciting world of real-world asset tokenization.

Some big names are in hot water this week, so let’s cut to the chase!

🎯🔥 Rapid Fire Takeaways:

☢️ Crypto Industry Goes Nuclear With Uranium-Linked Tokens

⌚ Asset managers expect fund tokenization within 1-3 years

🤑 Republic's Profit-Sharing Token on Avalanche Will Pay Investors VC Dividends

⛰️ Canton of Zurich issues digital bond settled with wholesale CBDC

💬 Canada consults on bank crypto disclosures

⚖️ Binance DOJ settlement $4.3 billion. CZ steps down, pleads guilty

The Old World loves it, but the New World seems unsure. 

Let’s take a closer look.

⛓️ New Tokenization on the Block(chain)

Alternative assets of all types are undergoing tokenization, benefiting accessibility, liquidity, and transparency – uranium is no exception. Uranium3o8 has successfully brought the world’s most controversial spicy rock onto the blockchain with its recent offering. For a mere 20,000 $U tokens, you can take physical delivery of your 20,000 lbs. of high-quality yellow cake. 

Sleek joined the party this week, closing their $5 million round led by Binance Labs and Shima Capital. A Web3 social company, Sleek previously introduced business cards for sharing contact info and displaying NFTs. Now, they’re using bonding curves, similar to Friend, for video content and calls with creators, targeting the fragmented and inefficient market of knowledge-based businesses and online content creators.

📈 All Up From Here?

The wider financial world has also thrown its weight behind tokenization. And no longer just the trend-chasing, social-facing brands (we’re really not expecting too much from Budweiser’s metaverse). An incredible 67% of US-based asset managers expect to have a tokenized product on the market within the year. Moreover, 96% (!!!) of Asian asset managers expect to tokenize funds within three years. 

Data like this backs up Peter Gaffney’s take that tokenization and real-world assets are taking center stage this cycle. Citing names like J.P. Morgan, Goldman Sachs, and Vanguard, Peter does a great job of corralling all the latest and greatest tokenization developments we’ve seen lately – keep up the excellent work! 

While we have stars, tokenization is a team sport, which is how the World Tokenization Summit kicked off its second annual gathering in Dubai on November 21st. Primarily sponsored by Unicoin, the partnership lineup included big names in tokenization such as Digishares, Aconomy, Tokeny, and more. Global organizations like EY, Accenture, and BOSCH also attended, showing that traditional firms and tokenization entities are starting to comingle. 

🌌 New Frontiers for Digital Securities

While big corporates talked about big ideas for tokenization, existing digital securities were making moves. Osaka Digital Exchange announced that it’s launching Japan's first digital securities trading platform to meet rising demand for alternative, higher-return assets. The auction features security tokens issued by real estate firms Ichigo Inc. and Kenedix Inc., with the former planning to offer around ¥3 billion ($20.1 million) in real estate-backed securities. 

Meanwhile, Republic launched its R/Note on the Avalanche blockchain, a tokenized security that distributes stablecoin dividends from its venture portfolio exits to investors. Republic sold $30 million worth of R/Note in a public sale and aims to make tokenized securities more accessible and manageable by handling issuance and trading in-house. This move highlights the growing division between the more laissez-faire culture of crypto and the stringent regulatory requirements of asset (particularly security) tokenization. 

But when has that ever stopped Switzerland? This week, the Canton of Zurich issued a CHF 100 million digital bond on the SIX Digital Exchange (SDX) that settled using the wholesale central bank digital currency (CBDC) issued by the Swiss National Bank. The City of Lugano issued a similar bond earlier this year, and the approach impacts settlement times positively. 

🏠 North America Cleans House 

While Switzerland embraces tokenization, North America seems a bit less enthused this week. Canada’s OSFI has been consulting banks on tokenization, reminding them that reporting on crypto is a bi-annual event separate from other disclosure requirements. The recent consultations include adaptations of the Basel disclosure requirements, suggesting a slow crawl towards a global mutual understanding of handling digital assets. 

Across the southern border, The Department of Justice finally settled with Binance Holdings for a cool $4.3 billion. It’s quite the rap sheet: failure to obtain necessary U.S. licenses, ineffective anti-money laundering program, and sanctions violations are nothing to balk at. To make amends, Binance Holdings must pay a $1.8 billion criminal fine, $2.5 billion in forfeiture, $2.7 billion to the CFTC, and $850 million to FinCEN and OFAC… oh, and crypto giant CZ is stepping down a CEO—the end of an era. 

But wait, there’s more! Not to be outdone, the SEC is suing cryptocurrency exchange Kraken, alleging commingling of customer and corporate funds. The alleged commingling dates back to 2020 and 2021, with the lawsuit also highlighting concerns about how they handle margin accounts. Given the SEC is already out for blood with Coinbase, what’s one more domestic case? 

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So what do you think?

Tokenization: here to stay, or is this just another hype cycle?

Let us know your thoughts on Twitter or LinkedIn, and check out the RWA World Database – the full ESG Report is now live, and we analyze 20+ projects working in ESG, carbon credits, agriculture, energy, and beyond.