In an era where digital transformation is reshaping industries, one of the most revolutionary concepts to emerge is tokenisation. Tokenisation allows virtually any asset to be divided into digital fractions, which can be securely stored and traded on blockchain networks.
In his session, The Tsunami of Tokenisation is Upon Us - Are You and Your Clients Ready, Alan Sellers explains that this innovation is poised to have a profound impact across various sectors, from property and equities to intellectual property and intangible business assets.
What is Tokenisation?
Tokenisation is the process of converting real-world assets into digital tokens that can be traded on blockchain platforms. Each token represents fractional ownership of the underlying asset, whether it is a commercial property, an artwork, or shares in a business. These tokens can be bought, sold, and exchanged easily, providing a new level of accessibility and liquidity to markets that have traditionally been restricted to high-net-worth investors.
Consider the example of real estate tokenisation. Instead of requiring a buyer to purchase an entire property, the asset can be divided into smaller digital shares. This enables a broader pool of investors to gain exposure to high-value assets without the need for large capital investments. The same principle applies to other tangible and intangible assets, allowing for greater financial inclusivity and investment diversification.
Why Tokenisation Matters
1. Enhanced Accessibility
Tokenisation significantly lowers the barrier to entry for investors. Traditionally, high-value assets such as commercial properties or fine art were only accessible to wealthy individuals and institutions. By breaking these assets into smaller, affordable tokens, tokenisation democratises investment opportunities, allowing a wider audience to participate in markets that were previously out of reach.
2. Increased Liquidity
One of the major drawbacks of investing in real estate, art, or other high-value assets is their lack of liquidity. Selling an entire building or a painting can take months, if not years. Tokenisation addresses this issue by allowing fractional ownership units to be traded more quickly and efficiently on digital platforms, similar to the way stocks are exchanged in financial markets.
3. Transparency and Security
Blockchain technology underpins tokenisation, providing an immutable and transparent ledger of ownership and transactions. This ensures that every transaction is traceable, reducing the risk of fraud and increasing confidence in asset ownership. Additionally, smart contracts can automate and enforce agreements without the need for intermediaries, further streamlining the investment process.
4. Capital Raising Opportunities for Businesses
Beyond physical assets, tokenisation is now being applied to intangible business assets such as intellectual property, brand value, and goodwill. Small and medium-sized enterprises (SMEs) often struggle to unlock the value of these assets due to a lack of financial mechanisms. By tokenising these assets, businesses can attract investors, raise capital more efficiently, and monetise value that was previously locked within their balance sheets.
The Future of Tokenisation
As regulatory frameworks evolve and blockchain technology becomes more widely adopted, tokenisation is set to revolutionise investment markets on a global scale.
Tokenisation is more than just a technological advancement—it is a financial revolution. By making high-value assets more accessible, increasing liquidity, and enhancing transparency, tokenisation is reshaping how investments are structured and traded. As adoption continues to grow, businesses and investors alike must stay ahead of the curve to capitalise on this transformative shift in the financial landscape.
For the full session, please click here. In this course Alan Sellers covers the following topics:
- Background of blockchain and digital assets and how tokenisation fits in
- What is tokenisation?
- Which assets can be tokenised? The real world examples
- How can assets be tokenised and what would the benefit be to accountants and businesses?
- The future of tokenisation and how it will impact accountants and their clients
The contents of this article are meant as a guide only and are not a substitute for professional advice. The author/s accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article. The information at the time of publishing was accurate and could be subject to final changes.
