Bank of America analysts say asset tokenization — turning ownership of stocks, bonds, real‑world property and other assets into blockchain‑backed tokens — could reshape how investors access liquidity and portfolios, but widespread adoption faces meaningful hurdles.
At its core, tokenization replaces traditional ownership records with on‑chain tokens that can represent shares in private equity, fractions of real estate or pieces of artwork. The bank highlights several practical advantages: 24/7 trading that could create secondary markets for previously illiquid assets; fractional ownership that lowers investment minimums; and greater transparency from immutable ledgers.
Bank of America also points to operational gains: smart contracts can automate dividend or coupon payments, voting and capital‑call mechanics, and reducing intermediary layers may cut fees. On‑chain tracking is already material — data provider RWA.xyz estimates real‑world assets on chain exceed $28 billion.
Still, the report stresses material risks. The biggest obstacle is regulatory uncertainty: rules are evolving and could vary across jurisdictions. Custody remains a practical concern — misplacing private keys can mean losing access to tokenized holdings — and institutional‑grade custody and reconciliation with legacy systems are works in progress. Smart‑contract bugs and platform vulnerabilities add security risk, while listed public markets already offer deep liquidity and investor protections that tokenized versions may struggle to match.
What this means for investors and managers: tokenization promises new ways to access and divide value, especially for private assets, but progress will likely be gradual and hinge on clear regulation, robust custody solutions and secure integration with existing infrastructure. Watch for pilot programs and regulatory guidance as early indicators of broader adoption.
Source: CoinDesk. Read the original coverage for full details.