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  • Tokenization: How are financial institutions and BCs preparing for the next wave of the digital revolution?

Tokenization: How are financial institutions and BCs preparing for the next wave of the digital revolution?

Tokenization has been moving towards an increasingly popularization among people and companies. Now, traditional financial institutions are also preparing for the revolution it promises. The possibilities of the token in the future have not even been fully dimensioned. In theory, anything can be tokenized, from money or agricultural crops, to passes from football players.

Today, several models are already being used in Brazil as a virtual guarantee for loans from fintechs and banks. This is because alphanumeric combinations prevent interceptions and make digital transactions very secure. This series of padlocks and their keys are the engine of operations that are moving the world through digital wallets, e-commerce purchases or streaming subscriptions. And the opportunities in the future continue to grow.

The Central Bank of Brazil recently launched the development of a digital currency (CBDC) that will be tested in 2023. In addition, Roberto Campos Neto, president of the entity, argues that the country is migrating to a tokenized economy, as there is an intense search for digital representations of the most diverse assets.

Faced with many questions about the technology itself and security, but also about regulatory aspects, the market gropes the sector while the BC carries out an intense agenda. In addition to all the dedication to developing Real Digital, the autarchy created an interdepartmental working group to specifically discuss the tokenization of assets, taking the topic to internal agents and proving that the agenda is in its focus. The most accepted idea in the market is for the ecosystem involved to reach an agreement on a common network of registries. And the guideline is to bring the maximum amount of assets into the BC. It is possible to build bridges between different blockchains, but these connections end up becoming weaknesses in operations.

In the dialogue between market agents, it is possible to perceive the preference for a single infrastructure, but this consolidation can also negatively impact and overthrow the main benefits that the crypto world offers, such as independence and security.

In this sense, it is unlikely that companies prefer to issue tokens directly on the closed blockchain, for even ideological reasons, after all, the system was born from the concept of decentralization. Furthermore, open blockchains like ethereum and polygon have proven to be very efficient from a cost, speed and security perspective.

On the other hand, when talking about national currencies, it is essential to obtain standards that follow the country’s monetary policy rules. The digital real blockchain, for example, must be of the permissioned type to guarantee standardization for the entire population.

Tokenization has become a reality on the one-way street of digitizing economies. It is a more than proven form of agility and security in the supply of goods, products, services and rights.

The good news is that this enabling environment for the development of tokenization will benefit many business models that can use tokenization as an effective supply and transaction vehicle. Regardless of the next decisions in the country’s public sphere, both the government and companies, banks and startups are preparing what will be a new way of doing business, payments, investments and financial inclusion.

Source: Web3News

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