- Tokenization, the process of converting real-world assets into digital tokens, is increasingly recognized for its potential to democratize access to investments like real estate, offering enhanced liquidity, security, and lower transaction costs.
- The global market for tokenized assets is projected to reach $24 trillion by 2027, driven by the benefits of blockchain technology in fractional ownership, transparency, and streamlined trading processes.
- Taurus, having received regulatory approval from FINMA, positions itself as a key player in this growing market with its Taurus-Protect platform, offering efficient tokenization solutions for a variety of assets on multiple blockchain protocols.
By Paul Godwin
Taurus, a leading provider of digital asset infrastructure solutions, has announced that it has received approval from the Swiss Financial Market Supervisory Authority (FINMA) to operate as a securities firm and a bank. This is a major milestone for the company, which has been developing its tokenization platform, Taurus-Protect, since 2019.
Taurus-Protect is a comprehensive solution for issuing, managing and trading tokenized assets, such as shares, bonds, funds, art and real estate. It enables issuers to create digital representations of their assets on various blockchain protocols, such as Ethereum, Tezos and Polkadot. It also offers investors a secure and user-friendly interface to access and trade these assets, as well as custody and settlement services.
Taurus claims that its platform can reduce the costs and complexity of tokenization by up to 90%, compared to traditional methods. It also aims to increase the liquidity and transparency of the tokenized asset market, which is expected to grow exponentially in the coming years. According to a report by PwC, the global market for tokenized assets could reach $24 trillion by 2027.
With the FINMA approval, Taurus can now offer its tokenization services to a wider range of clients, including banks, asset managers, corporates and public institutions. It can also expand its operations to other jurisdictions, as it plans to apply for similar licenses in Europe and Asia. Taurus co-founder and CEO Sébastien Dessimoz said:
“We are very proud to have obtained this authorization from FINMA, which is a testament to our vision and the quality of our work. Tokenization is a game-changer for the financial industry, and we are excited to be at the forefront of this innovation. We look forward to helping our clients leverage the benefits of tokenization and bring more efficiency, inclusivity and sustainability to the financial system.”
Some of the benefits of tokenization
Increased liquidity: Tokenization can unlock the value of illiquid assets such as real estate, art, or private equity by creating fractional ownership and lowering the barriers to entry for investors.
Enhanced security: Tokenization can reduce the risk of fraud, theft, and counterfeiting by using cryptography and smart contracts to verify and enforce the ownership and transactions of tokens.
Reduced costs: Tokenization can eliminate intermediaries and streamline processes such as settlement, clearing, and compliance by using decentralized networks and protocols.
Improved transparency: Tokenization can increase the visibility and traceability of assets and transactions by using immutable and auditable ledgers.
Greater inclusion: Tokenization can democratize access to financial opportunities and services by enabling anyone with an internet connection and a digital wallet to participate in the token economy.
Tokenization is not a new concept…
…but it has gained momentum in recent years thanks to the development of blockchain technology and the emergence of various platforms and standards for creating and managing tokens.
Some examples of tokenization projects include:
Security tokens: These are tokens that represent regulated securities such as stocks, bonds, or derivatives. Security tokens aim to bring more efficiency, liquidity, and compliance to traditional financial markets. Examples of security token platforms include Polymath, Securitize, and tZERO.
Utility tokens: These are tokens that provide access to a service or network. Utility tokens are often used to incentivize users and developers to contribute to the growth and maintenance of a platform. Examples of utility token platforms include Ethereum, Filecoin, and Binance Coin.
Non-fungible tokens (NFTs): These are tokens that represent unique and indivisible assets or rights. NFTs can be used to create digital scarcity and provenance for things like art, collectibles, gaming items, or intellectual property. Examples of NFT platforms include CryptoPunks, NBA Top Shot, and OpenSea.
Tokenization is a game-changer for the financial industry because it enables new ways of creating and exchanging value in the digital world. Tokenization can also foster innovation, competition, and collaboration across various sectors and domains. As the token economy grows and matures, we can expect to see more use cases and applications of tokenization that will transform the future of finance.
DeFi Is Bitcoin’s Missing Ingredient
Bitcoin is the most popular and valuable cryptocurrency in the world, but it has some limitations that prevent it from reaching its full potential. One of these limitations is the lack of decentralized finance (DeFi) applications on the Bitcoin network
DeFi is a term that refers to a variety of financial services that are built on decentralized platforms, such as smart contracts, lending, borrowing, trading, insurance, and more. DeFi aims to create a more open, transparent, and inclusive financial system that is accessible to anyone with an internet connection.
However, Bitcoin was not designed to support complex smart contracts or DeFi applications. Its scripting language is limited, and its transaction throughput is low. This means that most DeFi projects are built on other blockchains, such as Ethereum, Binance Smart Chain, or Solana, which offer more flexibility and scalability.
This creates a problem for Bitcoin holders who want to participate in the DeFi ecosystem. They have to either convert their bitcoins to other tokens, which incurs fees and risks, or use centralized services that act as bridges between Bitcoin and other blockchains, which defeats the purpose of decentralization.
This Is Where DeFi on Bitcoin Comes In
DeFi on Bitcoin is a movement that aims to bring the benefits of DeFi to the Bitcoin network, without compromising its security or decentralization. There are several ways to achieve this goal, such as:
Using sidechains or layer-2 solutions that are pegged to Bitcoin and allow for faster and cheaper transactions and smart contracts. Examples include Liquid Network, RSK, and Stacks.
Using interoperability protocols that enable cross-chain communication and asset transfer between Bitcoin and other blockchains. Examples include Ren, Thorchain, and Polkadot.
Using wrapped tokens that represent bitcoins on other blockchains and can be used in DeFi applications. Examples include WBTC, renBTC, and tBTC.
By enabling DeFi on Bitcoin, we can unlock the full potential of both technologies and create a more robust and diverse crypto ecosystem. DeFi on Bitcoin can offer:
More utility and value for Bitcoin holders who can use their bitcoins in various DeFi applications and earn interest, rewards, or fees. More security and trust for DeFi users who can benefit from the proven track record and network effects of Bitcoin. More innovation and growth for DeFi developers who can leverage the largest and most liquid crypto asset in the world.
DeFi is Bitcoin’s missing ingredient that can take it to the next level of adoption and impact. By combining the best of both worlds, we can create a more decentralized, inclusive, and efficient financial system for everyone.
If you are interested in participating in DeFi on Bitcoin, you have several options to choose from. You can use one of the platforms mentioned above to access DeFi services on Bitcoin or other blockchains. You can also use a decentralized exchange (DEX) that supports cross-chain swaps, such as Atomic DEX or Liquality.
Alternatively, you can use a custodial service that offers DeFi products on Bitcoin, such as Block Fi or Nexo. However, you should always do your own research and be aware of the risks involved before using any DeFi service.
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