Second Larry Fink of BlackRock, the tokenization of securities and next-generation assets, as well as the merger between decentralized finance (DeFi) and traditional assets, it has been held back by a lack of infrastructure and global regulatory standards.
“There simply aren’t any institutional-grade systems for these companies to get involved with. Obviously, they’re not going to run the entire system using a regular blockchain wallet and centralized exchanges.”he has declared Colin Butlerglobal head of institutional capital at Polygon.
Tokenization is a fractionation method that allows more people to own a portion of an asset that previously would have been sold whole and at a higher value. PwC, a Big Four company, expects global assets under management to reach 2025 the 145.4 trillion dollarsa huge market that is expected to welcome more investors and therefore improve asset liquidity thanks to tokenization.
Institutional investors — those who manage this capital around the world — are looking for “services that work well with what they are already doing, that are easy to implement, flexible and upgradeable”Butler said.
Polygon said it is working with many of these global players. In January, the investment company Hamilton Lane announced the first of three tokenized funds backed by Polygon, bringing part of its funds on-chain $824 billion in assets under management. By tokenizing its main fund, Equity Opportunities FundHamilton Lane was able to reduce the minimum investment required by an average of $5 million to $20,000.
We are thrilled to share that a portion of our recently closed Equity Opportunities Fund V is now accessible to qualified investors through a new feeder fund of @Securitize tokenizzato su @0xPolygon. Read more: https://t.co/ZxfaNJwgBx pic.twitter.com/4SOezI2Ma2
— Hamilton Lane (@hamilton_lane) January 31, 2023
We are excited to share that a portion of our recently closed Equity Opportunities Fund V is now accessible to qualified investors through a new @Securitize feeder fund tokenized on @0xPolygon. Learn more: https://t.co/ZxfaNJwgBx pic.twitter.com/4SOezI2Ma2
— Hamilton Lane (@hamilton_lane) January 31, 2023
Another example is JPMorgan. In November, the US giant executed its first cross-border DeFi transaction on a public blockchain. The initiative was part of a pilot program exploring the potential of DeFi for wholesale funding markets. The transaction was also performed on the Polygon network.
Despite recent progress in integrating DeFi into traditional markets, a lack of clarity around regulation continues to hold many back from embracing emerging technologies. One of the main questions on this topic is: What are security? The US Securities and Exchange Commission has said through enforcement actions that the definition can apply to a wide range of assets and services. As Butler asked:
“If you tokenize a security, does the digital token itself become a security or just represent it?”.
Jez Mohideenco-founder and CEO of Laser Digital — the crypto arm of Japanese banking giant Nomura — believes that the lack of regulation affects the risk management of digital assets, as it prevents companies from effectively separating units and business models.
“Stricter regulation is especially needed in some business areas — for example to make sure that capital is managed by people with fiduciary responsibilities. As regulation of this kind increases, there will be growing interest from institutions,” he told Cointelegraph.
![Bitcoin plunges to the $20,000 level, what will happen to employment statistics?[Virtual currency market]](https://www.arover.net/wp-content/uploads/2023/03/Bitcoin-plunges-to-the-20000-level-what-will-happen-to-360x180.jpeg)
