World markets are raging with uncertainty. It’s not that the crypto market has ever been particularly stable, but what is happening now in the crypto world can significantly affect the development of decentralization and web3, which is very important for us at Stobox and the industry as a whole. Therefore, we decided to share with you our vision of the situation and the possible consequences of its rapid development.
Let's start with the fact that asset tokenization is not directly related to the cryptocurrency market.
Many people confuse calling tokenized assets cryptocurrencies. This is a deep delusion. What is really being used is distributed ledger technology (DLT) or the blockchain itself. It is thanks to blockchain technology that the implementation of the concept of asset tokenization has become possible. Before its appearance, such a phenomenon as tokenization was unthinkable.
Real, not virtual!
The second fundamental difference is the fact that tokenization is the ability to display a real asset on the blockchain. Real, not virtual. The value of a tokenized asset cannot be less than its real value.
For example, real estate tokens of a villa in Hawaii will not cost less than the villa itself.
Rather the opposite! Due to the factional ownership and the option of free secondary trading, the total value of the tokenized asset will increase by 25% -40%.
The third and significant difference is the fact that tokenization is not only a technical process but also a legal and operational one. An issuer cannot create a token on the blockchain and imagine that this is a tokenized business. The complex process of legal justification and linking an asset to a smart contract is an integral part of the legalization of tokens. Without legal binding, it's just a scam!
The last and perhaps the most complex block is the process of the initial sale of such a tokenized asset. Securities specialists are well aware of the regulations and restrictions that are introduced by regulators to protect investors in their countries. However, investors who have dealt exclusively with cryptocurrencies are not aware of the regulations and look at the world through rose-colored glasses that blush from time to time from what is happening in the market.
This is what financial regulators are there for. Protect ordinary investors from scammers to whom public investors bring their savings in the hope of buying a Lambo and escaping to the Moon.
That is why we at Stobox believe in the tokenization of assets; and not in inflating crypto bubbles, which are backed up solely by the assurances of the project's founders, many of which are not even able to pass the KYC, let alone be responsible to investors. Without being fortunetellers and clairvoyants looking into crystal balls, one can notice a clear trend toward the formation of regulatory rules for the cryptocurrency market.
The question is not the regulation of the crypto market itself, but when and to what extent it will happen.
The recent bankruptcy of one of the largest cryptocurrency exchanges - FTX, demonstrated not just a negligent attitude towards finance, but rather a complete absence of any kind of decent management. The bankrupt FTX flushed away billions of investor money, including deposits from ordinary investors in stablecoins. This undermines the credibility of the crypto market and raises the question of not just regulation, but of strict regulation, equating digital assets with financial ones. The lack of proper transparency and financial schemes implemented by crypto-billionaires managing exchanges and custodian wallets do not leave faith even in the most devoted crypto enthusiasts and fans of decentralization.
Understanding these sentiments and the course of market development, Stobox company continues to develop products and services directly related to tokenization and the legal circulation of digital assets.
Optimism is added not only by the fact that we are pioneers in the industry but also by the fact that quite significant players in the financial market are beginning to share our views. For example, at the beginning of December, BlackRock CEO Larry Fink said that "the next generation for markets, the next generation for securities, will be tokenization of securities."
Speaking at a New York Times DealBook event, Fink argued that tokenization will provide “instantaneous settlement” and “reduced fees.” Despite these advantages, he added that the development of this type of technology wouldn’t disrupt BlackRock’s business model. That means that they have already included tokenization in their long-term plans which becomes a benchmark for the entire market.
Blackrock is not the only one staking on tokenization, but we are seeing a significant increase in interest from the market in general. More and more companies are turning to us with questions about the implementation of projects, which gives significant strength for further work. CEO of Stobox Gene Deyev.