Tokenized Securities Market: HUGE $

Citigroup, one of the world’s largest banks, is exploring the potential of tokenized securities as a way to streamline and enhance the trading process. The bank’s innovation lab, Citi Innovation Lab, has developed a proof-of-concept for a tokenized securities platform that aims to bring together all aspects of securities trading, from issuance to trading and settlement, on a single blockchain-based platform.

Tokenized securities, also known as digital securities or security tokens, are traditional securities such as stocks, bonds, or funds, represented on a blockchain network. By using blockchain technology, tokenized securities offer several advantages over traditional securities, including increased transparency, reduced costs, and faster settlement times. Just wait until you see what Wadzpay is going to bring to the market.

Citi’s platform, which is currently in the testing phase, aims to provide a streamlined, end-to-end solution for the issuance, trading, and settlement of tokenized securities. The platform will enable issuers to tokenize their securities, which will be traded on the platform by investors. The platform will also provide a range of tools and services to facilitate the trading and settlement process.

The potential use cases for tokenized securities are vast, with the technology offering a range of benefits to issuers, investors, and regulators. For issuers, tokenized securities offer a way to raise capital more efficiently, by reducing the costs associated with traditional securities issuance. Tokenized securities can also be programmed with a range of features, such as automatic dividend payments or share buybacks, which can be executed without the need for intermediaries.

For investors, tokenized securities offer increased liquidity, enabling investors to trade their securities more easily and at a lower cost than traditional securities. Tokenized securities can also be traded 24/7, allowing investors to buy and sell securities outside of traditional market hours.

Regulators also stand to benefit from the use of tokenized securities, as the technology offers increased transparency and real-time monitoring of trades. Tokenized securities can also be programmed with regulatory compliance features, such as automatic KYC and AML checks, which can help reduce the risk of fraud and other illegal activities.

According to a report by Polymath, a security token platform, the tokenized securities market could reach $10 trillion by 2025. While this may seem like an overly optimistic projection, there is no doubt that the market for tokenized securities is growing rapidly.

A report by PwC predicts that the global market for blockchain-based securities could reach $2.7 trillion by 2030, up from just $140 billion in 2020. The report notes that tokenized securities are already being used in a range of industries, from real estate and art to sports and entertainment.

One factor driving the growth of tokenized securities is the increasing demand for alternative investment opportunities. With interest rates at historic lows, investors are looking for new ways to generate returns, and tokenized securities offer a way to invest in a range of asset classes, including real estate, private equity, and venture capital.

Another factor driving the growth of tokenized securities is the increasing interest from institutional investors. While retail investors have been quick to adopt the technology, institutional investors have been slower to embrace tokenized securities. However, this is starting to change, with a growing number of institutional investors exploring the potential of tokenized securities.

One example of this is the recent partnership between the Swiss stock exchange SIX and the Spanish stock exchange BME, which have joined forces to create a platform for trading tokenized securities. The platform, called MTF (Multilateral Trading Facility), aims to provide a regulated and transparent marketplace for tokenized securities.

Despite the potential of tokenized securities, there are still several challenges that need to be overcome before the market can reach its full potential. One of the biggest challenges is regulatory uncertainty, with many jurisdictions still unclear on how to regulate tokenized securities.