Patrick Akiki
Partner, Financial Services Market Leader, PwC Switzerland
Tokenisation is set to reshape the financial services industry, creating new markets and unlocking trillions in value.
Are you, the financial services players, ready to capture the new opportunities ahead?
The tokenisation of everything
Tokenisation is a proven solution to convert the rights to and the value derived from an asset into a token on the blockchain, which has been proved to offer the benefits of trust, transparency and real-time transaction settlement. The possibilities are endless – theoretically any asset can be tokenised.
Tokenisation expands the realms of digital markets beyond cryptocurrencies and into the trading of physical goods and real-world assets over the blockchain, allowing them to overcome physical and geographic boundaries as well as traditional opening times and market hours.
The benefits of tokenisation
Tokenisation leverages the benefits of DLT in accessibility, efficiency and transparency.
Accessibility and fractionalisation: bringing access and liquidity to new markets
- Increases liquidity by fractionalising indivisible assets
- Expands investor participation through wider investor base and enhanced global reach
- New revenue streams from new and unique product offerings
Efficiency and programmability: streamlining processes and reducing costs
- Enables real-time settlement and 24/7/365 trading
- Automates and streamlines administration across the trade lifecycle
- Creation of new dynamic assets with smart contracts
Transparency and security: a single source of shared data that can be trusted
- Transparency and traceability of transactions and beneficial ownership
- Immutability enables higher degree of data integrity
- Simplifies data reconciliation for multi-party processes via a shared data source
Unlocking opportunities in promising markets
Over the past decade, appetite for alternative investments has been growing considerably as yield-starved investors turn to new markets in search of higher and uncorrelated returns. Despite their rise in popularity with asset managers, asset classes such as private debt/equity, commodities and real estate are still characterised by high barriers to access, illiquidity and opaque processes. Below are a few examples of the value that tokenisation could bring to these promising markets:
Private equity
Value: adding liquidity; broadened access; secondary trading to one of the largest asset classes; unlocking funds for PE firms to reinvest; increased efficiencies through automation of administration.
Syndicated loans from infrastructure projects
Value: deleveraging of balance sheets for banks; increased availability of capital; minimised risk through process transparency; automation and operational efficiency.
Precious metals and commodities
Value: speed of settlement; reduced overhead costs; enhanced traceability/provenance.
Real estate
Value: accessibility and divisibility of large assets; enhanced liquidity; reduced time-to-market and costs; efficiency of administration.
Art
Value: revenue from new markets and novel royalty systems; security of intellectual property; broadened investor participation via expanded access and fractionalisation; embedded provenance.
Let’s plan your next move
PwC offers a one-stop shop to help you on every step of your tokenisation journey. From developing your business case and engaging with the regulator, to readiness and implementation, PwC can provide the required capabilities and industry expertise that positions you, our client, to take advantage of the opportunities ahead.
Contact us
Director, Business, Regulatory and Digital Asset Transformations, PwC Switzerland
Tel: +41 79 238 62 78