The rise of token technology explained

Author: Morgan Lewis & Bockius | Published: 31 Oct 2019

The tokenisation of assets is the process of issuing a blockchain token that digitally represents rights to, or a unit of ownership in, an underlying real world asset. The token might represent a share in a company, a real estate-backed bond, or participation in an investment fund. Equally, it might be linked to a less liquid asset, like a royalty, art work or a classic car.

Tokenisation has great potential to make the industries it disrupts more accessible and investment in the underlying assets more efficient. These advantages will be most apparent in asset classes that are relatively illiquid and can therefore benefit from lower financial barriers to entry and greater geographical reach.

Indeed, some commentators believe that it is only a matter of time before every asset class – and a significant proportion of global GDP – is digitised.

Why tokenise an asset?

Taking real estate as an example, the ability...