Blockchain tokenization has gained more traction in the financial industry recently. It allows people to convert their ownership rights or assets into digital forms to secure them. In the latest development, the German generational bank DekaBank revealed plans to release its blockchain-based tokenization platform next year.
But as per the details, the focus is not on regular crypto assets such as Bitcoin but on funds and stocks.
DekaBank Partners With Metaco To Launch Its Blockchain-Based Platform
DekaBank is collaborating with Metaco, a digital asset management company, as it plans to launch the platform in 2024. After sealing their partnership deal, the two parties announced the move on January 31, 2023. The partnership will launch Harmonize, the core blockchain-based platform providing institutional digital assets.
According to Andreas Sack, the digital asset custody executive at DekaBank, the 105-year-old German bank will use this year to prepare the infrastructure. He noted that the platform is expected to launch the leading minimum sustainable product the firm offers in its crypto custody solution. Also, while the platform will fully kick off next year, they will conduct the first test transaction in 2023.
Further, Sach revealed that the new infrastructure is focusing on different areas. DekaBank targets the tokenization of bonds, stocks, and other funds that will open a new token economy.
The executive mentioned that the firm is taking its management solution to a different level as it includes tokenized assets on several blockchains. He tagged the firm as the key provider of the new token economy.
He acknowledged that several blockchains, such as Ethereum and Polygon, are already undertaking the industry’s tokenization process. However, he is unsure if existing networks will emerge as the standard in their idea.
Additionally, Sack explained DekaBank’s decision not to trade crypto assets in collaboration with Metaco. The executive suggested that the bank is interested only in regulated products as it is under the German Electronic Securities Act regulation.
Also, Sack stated that while some jurisdictions regulate crypto assets, some still have no regulations. Hence, such disparities in jurisdictional regulation pose risks that will affect their operations and implicate them as a company.
Tokenization And Blockchain Technology
Tokenization is used for different purposes involving blockchain technology. These include fungible tokenization, where the tokens are identical and replaceable, and non-fungible tokenization, where tokens can represent ownership of assets. Also, there are governance tokenization and utility tokenization, where tokens offer decision rights and access to specific products and services, respectively.
Cryptocurrency market cap falls below $1 trillion | Source: Crypto Total Market Cap on TradingView.com
The notable benefits of blockchain applications are numerous. It helps to secure the ownership rights of crypto assets, improve liquidity, and ensure convenience for financial transactions.
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