Liquidity Crucial for Tokenized Assets, Says Securitize CEO
Carlos Domingo, CEO of Securitize, emphasizes that liquidity is as important as accessibility when it comes to tokenized assets. He explains that tokenization does not inherently make illiquid assets liquid, as illiquidity is an inherent trait that a digital token inherits from its underlying asset. This trait complicates the rapid sale of tokenized assets with minimal loss.
Current efforts in tokenization focus on assets that already possess liquidity, aiming to amplify it. Notable examples include cash and U.S. Treasuries. Stablecoins, which represent a leading segment of approximately $300 billion in the crypto market, illustrate the potential to amplify liquidity through tokenization. Tokenized U.S. Treasuries amount to about $9 billion, while tokenized stocks account for roughly $681 million.
Securitize played a key role in issuing BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), a money-market product spanning multiple blockchains. Since its debut last March, BUIDL has reached about $2 billion in size. BlackRock executives noted in The Economist that tokenization could greatly expand the range of investable assets, especially by enabling smaller and more accessible units. This expansion is particularly relevant for emerging markets.
While tokenization offers the potential to broaden access to real estate and other asset classes beyond traditional institutional investors, its adoption remains closely tied to the liquidity of the underlying assets.
