(BUSINESS DAY) Bitcoin’s popularity comes from it being used as money, whereas tokens in general represent far more than medium of exchange. Every other digital currency does not function like bitcoin. Tokens can describe basically any assets that are tradable, from commodities to loyalty points to even other cryptocurrencies. Tokenization therefore refers to a method that converts rights to an asset into a digital token.
One expert describes it thus, “The tokenization of everything imagines a world where anything can be traded. Your liquidity is not restricted by cash or concrete assets. Instead, it can include anything you won, and maybe even your time.”
Inveniam’s new approach to token structuring benefits the global debt markets by ensuring levels of transparency, safety, accessibility, and efficiency yet to be seen in the current marketplace. Instead of being stored on the centralized database of an intermediary, data from Inveniam transactions is hashed and deployed to a distributed ledger, where it is cryptographically secured. Access is streamlined: an asset’s performance, payment history, compliance reviews, audits, and communication records are available to the token holder immediately. Since all data deployed to the blockchain is immutable, transactional information is tamper-proof, providing a high level of security for all parties involved. Moreover, these new tokens integrate with existing market systems, allowing for a transition to the new DLT technology in a manner which can be process driven for regulated entities. The token becomes the latest form or certification of the fixed income instrument as this has evolved over time, from a bearer bond, to a registered bond that certificated, to one held in street name in a master security file, to a decentralized ledger in token form. This time the certification not only acknowledges value, identity, but itself provides the provenance of the life of the instrument, and acts as the passkey for 100% of the data associated with the instrument.
As the first organization to tokenize fully functioning debt instruments in a commercial transaction, we believe that the adoption of new technologies must work in conjunction with the prevailing industry standards. This approach has enabled us to develop a comprehensive platform that serves as a bridge between cutting-edge blockchain technology and legacy processes within the financial industry. To learn more about Inveniam’s groundbreaking token structure and how it can transform the fixed income market, you can read our complete white paper, Introducing the Tokenization of the Global Debt Markets.