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What is Tokenization and its 8 Benefits

Tokenization and its benefits

Tokenization through Blockchain drastically simplifies the work of such complex products, which many investment banks had previously dealt with. Regulation and increased investor attention to commission costs have significantly weakened the competitive position of structured finance products compared to exchange traded funds (ETF); however, the use of blockchain is changing this situation every day.

Lower level of fees and higher level of security. Sales of structured products have steadily declined in recent years, in part as a result of regulatory changes.

Tokenization through Blockchain makes structured products much cheaper, faster, safer and more transparent, breathing new life into trillion-dollar financial product markets

Blockchain technology will minimize settlement risk, reduce settlement risk and brokers, the chance of human error and the number of different brokers between investors and structured product revenue.
Switzerland’s most trusted banks, such as Vontobel and Lienhardt & Partner Privatbank Zürich, have already issued structured products using all the benefits of blockchain and tokenization implementation. The Forbes newspaper stated that the mass introduction of blockchain technology will take place in a span of 4 to 7 years.

The benefits of blockchain tokenization at a glance;

  • Transparency
  • reduced costs
  • Less chance of human error
  • Minimized settlement risk
  • Potential absence of mediators
  • Democratization of product offer
  • Decentralization of structured products
  • Greater profitability for asset owners and investors

BLOCKCHAIN benefits for tokenization?

Revolutionize the financial sector

There are more than 1.7 billion adults around the world who do not have a bank account. Today, people on low incomes find it very difficult to open a bank account, protect their savings or access a loan or credit to start a small business. This is because banks require a credit history, regular income input to the account and high fees.

With blockchain technology, it is possible to overcome many of these limitations. As it is not necessary to have intermediaries in the operations, it is not necessary to resort to banks to have an account. It is possible to transfer and receive money using cryptocurrencies, without having to pay the expensive fees and validations of the traditional financial system. Smart blockchain trading is faster, more efficient, more responsible and accessible for everyone.

Prove real estate ownership and personal records

The blockchain allows you to keep important records with personal and medical information that, once in the system, becomes permanent and impossible to be improperly altered. This possibility is an excellent ally for people in extreme situations (such as refugees, trafficked people, illegal immigrants or for those living in areas of armed conflict). After all, this way, they can access their information anywhere, receive adequate medical care and assert their rights.

The technology also allows you to drastically reduce the cost of data collection and other administrative operations in emergency areas and prevent identity fraud.

Property owners are also able to always have documentation that proves their rights available, regardless of their situation. In this way, they can resolve disputes, especially in underdeveloped countries where corruption and land occupation are still a problem.

Fighting corruption and tax evasion

Corruption and fraud are two of the main problems facing many countries, and the reason for the growing gap between rich and poor. In this sense, blockchain technology offers an unprecedented level of security, total transparency and integrity of records in a decentralized network. Therefore, it is the ideal option to help maintain democracy, preventing fraud or electoral manipulation.

With the implementation of technology, government institutions can become more transparent in their interactions, paving the way for an impartial system. Likewise, if it is widespread and widely used by governments and people, it can be very efficient in collecting taxes and even ending the informal economy. Thus, there would be a substantial increase in public money available to fund welfare, universal medical care or even scientific investigation.

Greater transparency in corporate social initiatives

This technology is also an asset for companies, as it allows them to have a fully transparent process for their corporate social responsibility initiatives. It is possible to track the amounts collected until they reach the beneficiaries and account for the real impact generated by the actions.

Knowing the results of the initiatives will help to motivate employees and improve their engagement . But, above all, it will allow us to understand the company’s role as an agent of change in the world . Finally, understanding what is blockchain helps to materialize the transparency needed to meet the ESG criteria that investors are looking for.

Likewise, the blockchain can help ensure the sustainable origin of raw materials. With the tool, the user tracks the product from start to finish, keeping a history available for consultation. In this way, it makes any attempt at fraud impossible and validates organizations that demonstrate social and environmental concerns.

BLOCKBR Digital Assets is a fintech that unites technological innovation and digital knowledge, transforming physical assets into digital assets that we call tokens. Creating new financial products for the market in a democratic and decentralized way makes it simpler, as well as more efficient, how people will invest money and learn about new financial products.

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