The South Korean asset management giant Mirae Asset Securities has joined forces with Polygon Labs to facilitate tokenization and Web3 integration within traditional finance. The collaborative endeavour aims at creating an infrastructure for the issuance and transaction of tokenized securities on Polygon – an Ethereum-based layer 2 scaling solution. This development implies the translation of tangible assets such as real estate, equities, bonds, and art into cryptographic tokens underpinned by blockchain technology.
The synergy presents a glimmer of fascination. Still, one cannot dismiss the question on whether it will be a significant game changer in traditional finance or if it’s just another hype. On one hand, the Mirae Asset Security Token Working Group appears enthusiastic about going ahead without its parent entity, Mirae Asset. The group comprises other players including Coin Plug, Linger Studio, and more entities. Other separate entities such as SK Telecom’s Next Finance Initiative (NFI), which mainly focuses on security tokens, and Hana Financial are also involved in the grand march towards tokenized securities.
The apprehension is not without reason. Technology such as this could potentially disrupt existing financial systems by eliminating intermediaries, therefore reshaping capital markets. On the upside, this transition could lead to a more efficient, transparent and inclusive global financial system.
Sandeep Nailwal, Polygon Lab’s Executive Chairman, believes that the collaboration will greatly boost the adoption of Web3 technologies in the financial sector. Interestingly, he noted the efforts will also help establish interoperability between South Korea’s domestic financial systems and foreign financial systems.
Globally, we’re witnessing an increasing shift toward asset tokenization. Big names in finance such as Hamilton Lane and Franklin Templeton have kick-started tokenization projects on the Polygon platform. In fact, the Monetary Authority of Singapore performed foreign exchange and sovereign bond transactions successfully on Polygon last year as part of its experimental tokenization initiative, named Project Guardian.
Moreover, the government of El Salvador has also contemplated issuing tokenized Bitcoin bonds, a move not yet being executed. However, the backing of Michael Saylor, co-founder of MicroStrategy, who seemingly supports the potential of the technology to tokenize stocks and ETFs trading on NASDAQ, underscores the horizon’s promise.
A report by Dune Analytics indicates that tokenized public securities have a total market cap of around $343 million. Projections by Boston Consulting Group and ADDX suggest that asset tokenization could surge to $16.1 trillion by 2030, equating 10% of the world’s GDP. With such high stakes on the line, the future is certainly turning a keen eye on this spectacular crossover of finance and technology.
Source: Cryptonews
