Bullet Points:
• Industry experts discussed the potential of DeFI tokenization of real-world assets (RWA) at the Blockchain Economy London Summit.
• Private blockchains could risk fragmenting the industry ecosystem, with legal and regulatory requirements posing a challenge.
• The SEC is stalling DeFi tokenization progress in the US due to regulation difficulties.
Could 2023 Be the Year of DeFi Tokenisation?
Crypto industry experts recently gathered for the Blockchain Economy London Summit to discuss whether or not 2023 could be the year of DeFi tokenisation. Lennix Lai, Managing Director of OKX believes that through tokenising RWA, liquidity and fractionalisation can be achieved by reducing costs associated with centralized intermediaries, thus making fractional shares more attractive.
Private Blockchains Risk Fragmenting Industry Ecosystem
Prashant Malik from HSBC spoke on their Orion platform which has been developed to offer asset tokenisation for DeFi. He identified that while technology poses no main challenge, legal and regulatory requirements become increasingly complex as more product lifecycles are moved onto blockchain platforms. Malik further explores how private blockchains can offer diversity among assets but this may also lead to fragmentation in existing ecosystems.
SEC Stalling DeFi Tokenization in US
Jonathan Dunsmoor from Dunsmoor Law spoke about American regulatory hurdles in relation to DeFi tokenization and how these have caused stalling from the SEC over recent years. He argues that although other countries often look towards America for direction, the complexities surrounding CeFi/DeFi regulations make it difficult for them to stay up-to-date in terms of developments within this area.
Conclusion
The discussion at the Blockchain Economy London Summit highlighted a number of issues surrounding DeFi Tokenisation including liquidity and fractionalisation, legal/regulatory requirements and American regulation difficulties as key elements which need to be addressed before this technology can reach its full potential.