Tokenizing real-world assets, or RWAs, is a big deal in finance right now. It means taking things like property or stocks and turning them into digital tokens on a blockchain. Switzerland has been pretty forward-thinking about this, especially with its DLT Act. This law is basically Switzerland's way of saying, 'We're ready for this digital future.' It's all about making sure that even though things are changing fast, the rules are clear and people can trust the system. This article looks at what the DLT Act means for RWA tokenization in Switzerland and why it's becoming a go-to spot for this kind of innovation.
Key Takeaways
- Switzerland's DLT Act updates existing laws to cover digital assets, offering a clear legal path for RWA tokenization.
- The Act defines different token types (payment, utility, asset) and provides rules for issuing 'DLT rights' on ledgers.
- Compliance with AML and KYC rules is mandatory, just like in traditional finance, to prevent illicit activities.
- Switzerland's approach provides legal certainty, making it attractive for institutional-grade RWA projects.
- The DLT Act aims to integrate blockchain technology into the financial system while maintaining trust and security.
Understanding RWA Tokenization in Switzerland
The Evolving Landscape of Digital Assets
So, what exactly is Real-World Asset (RWA) tokenization? At its heart, it's the process of taking something tangible or intangible that has value in the physical world – like a building, a piece of art, or even a loan agreement – and representing its ownership rights as a digital token on a blockchain. Think of it as creating a digital certificate for a real asset. This digital representation can then be managed, traded, and utilized within the digital economy, much like cryptocurrencies, but it's backed by something concrete off-chain. It's a way to bring traditional assets into the digital realm, making them more accessible and liquid.
Switzerland's Proactive Stance on DLT
Switzerland has really leaned into the whole distributed ledger technology (DLT) thing. They've been pretty forward-thinking, setting up a legal framework that actually makes sense for digital assets. This isn't just about letting crypto companies set up shop; it's about creating a solid foundation for innovation. The Swiss DLT Act, for example, is a big deal because it gives legal recognition to tokenized securities. This means that when you have a token representing, say, a share in a company or a bond, it's treated with the same legal standing as traditional paper certificates. It’s a move that provides a lot of certainty for businesses and investors alike.
Key Benefits of Tokenizing Real-World Assets
Tokenizing real-world assets (RWAs) really shakes things up in the financial world, and honestly, for the better. It’s not just about making things digital; it’s about opening doors that were pretty much locked shut for most people. Here are some of the big wins:
- Increased Liquidity: Think about something like a commercial building or a rare piece of art. Traditionally, selling these things can take ages. You need to find a buyer, negotiate, handle a mountain of paperwork, and then wait for funds to clear. It’s slow and can be a real hassle. Tokenization changes that. By breaking down a big asset into smaller, digital tokens, you can trade them much more easily. These tokens can be bought and sold on various platforms, often 24/7. This means that an asset that was once stuck in one place can now be traded quickly, making it much more liquid.
- Fractional Ownership: This is a game-changer. Tokenization allows for fractional ownership, meaning investors can own smaller shares of high-value assets. So, instead of needing millions to buy a piece of a skyscraper, you could potentially buy a token representing a tiny fraction of it. This opens up investment opportunities that were previously out of reach for many, democratizing access to assets that were once exclusive.
- Enhanced Transparency: Blockchain technology, the backbone of tokenization, provides a transparent and traceable record of asset ownership and transactions. When RWAs are tokenized, the information about their ownership, transactions, and characteristics becomes accessible and visible to participants on the blockchain network. This transparency ensures that anyone with the appropriate permissions can easily verify and trace the history of an asset, promoting trust and accountability. It’s like having a public ledger for your assets.
The move towards tokenizing real-world assets isn't just a tech trend; it's a fundamental shift in how we can own, manage, and trade value. By bridging the gap between physical assets and the digital economy, we're creating new possibilities for investment and financial inclusion.
The Swiss DLT Act: A Foundation for Innovation
Switzerland really stepped up its game with the DLT Act, which came into effect in 2021. It's not a whole new law, but more like a smart update to ten existing federal laws. The goal was to make sure that distributed ledger technology, or DLT, fits neatly into the existing legal structure without leaving any gaps. This means things like digital assets and blockchain transactions are now on much firmer legal ground.
Amendments to Existing Federal Laws
The DLT Act made specific changes to laws covering things like corporate law, international private law, and even bankruptcy. The big idea was to apply existing rules in a way that works for new technologies. This approach avoids creating a separate, potentially isolating, legal world for DLT. It’s about making sure that whether an asset is on a traditional ledger or a blockchain, the same fundamental principles of fairness and security apply. This tech-neutral stance is a big reason why Switzerland is seen as a leader in this space. It allows for innovation while maintaining a high level of legal certainty, which is pretty important for financial markets.
Introduction of DLT Trading Facilities
One of the really interesting parts of the DLT Act is the introduction of a new license for "DLT trading facilities." Think of these as specialized stock exchanges designed for trading tokenized securities. These facilities can handle the multilateral trading of these digital assets. What's neat is that they can also offer custody and settlement services directly, which is different from traditional exchanges that usually rely on separate entities for those functions. This streamlined approach is designed to make trading tokenized assets more efficient and secure.
Legal Certainty in Insolvency and Bankruptcy
Before the DLT Act, what happened to crypto assets if a company went bankrupt wasn't always clear. The new law brings much-needed clarity here. It explicitly addresses how crypto-based assets should be handled in insolvency or bankruptcy proceedings. This segregation of assets helps protect investors and provides a more predictable outcome in difficult situations. It’s a move that significantly boosts confidence for anyone involved in tokenized assets in Switzerland.
The DLT Act's approach is all about integration, not isolation. By updating existing laws, Switzerland ensures that DLT innovations are built on a solid, familiar legal foundation, making it easier for businesses and investors to operate with confidence.
Token Classification Under Swiss Law
When we talk about tokenizing real-world assets (RWAs) in Switzerland, understanding how these digital tokens are legally classified is super important. It's not just a technical detail; it directly impacts how they're regulated and treated under Swiss financial market law. FINMA, the Swiss Financial Market Supervisory Authority, has laid out a framework to help sort these digital assets out. This classification is key because it determines which rules apply, kind of like how different types of vehicles have different traffic laws.
Defining Payment, Utility, and Asset Tokens
FINMA's approach breaks tokens down into three main categories, and it's pretty straightforward once you get the hang of it. This classification is crucial for understanding the regulatory landscape surrounding Real World Asset (RWA) tokenization in the EU for 2025 and beyond. Identifying suitable jurisdictions and regulatory frameworks is key for businesses operating in this evolving space.
- Payment Tokens: These are basically digital money, designed to be used as a means of payment. Think of cryptocurrencies like Bitcoin or Ether when they're used for transactions. They're meant to function like traditional currencies, facilitating payments between parties.
- Utility Tokens: These tokens are intended to provide access to a digital service or application. They're like a digital key or voucher. For example, a token that grants you access to a specific software feature or a platform's services would fall into this category. However, if a utility token can't be used as intended at the time of issuance, it might be reclassified.
- Asset Tokens: This is where things get really interesting for RWA tokenization. Asset tokens represent assets, like debt, equity, or even physical property. They function like securities, and their value is derived from an underlying asset or right. If a token is standardized, transferable, and represents an investment in an asset, it's likely an asset token.
The Role of Hybrid Tokens
Sometimes, a token doesn't fit neatly into just one box. These are what we call hybrid tokens. A single token might have characteristics of both a utility token and an asset token. For instance, a token could grant access to a service (utility) while also representing a share in the revenue generated by that service (asset). In such cases, Swiss law generally applies the strictest regulatory requirements that fit any of the token's functions. This means if a token has asset-like qualities, it will likely be regulated as a security, even if it also offers utility. It's a bit like a multi-tool; you have to consider all the functions it can perform when deciding how to store and use it.
The classification of tokens is not always black and white. FINMA's approach is risk-based, meaning the actual function and economic purpose of a token are what matter most. This case-by-case analysis helps ensure that regulations are applied appropriately to protect investors and maintain market integrity.
Implications for Financial Instruments
The classification of a token has significant implications for how it's treated under Swiss financial market law. If a token is classified as an asset token, it will likely be considered a security. This brings it under the purview of various regulations, including those related to issuance, trading, and investor protection. For example, tokens that qualify as securities might need to be issued in compliance with prospectus requirements or be offered only to qualified investors. The Swiss Federal Administrative Court has even clarified that pre-functional utility tokens are generally to be categorized as asset tokens if they are standardized and transferable, potentially qualifying them as securities. This means that even tokens initially designed for utility could end up being regulated as financial instruments, especially if they are structured for investment purposes. This careful categorization is what provides the legal certainty needed for the growing RWA tokenization market in Switzerland.
Regulatory Framework for Token Issuance
Conditions for DLT Rights Issuance
So, you've got this great idea for a tokenized asset, right? Before you can actually start handing out those digital tokens, Switzerland has some specific rules you need to follow. Think of it like getting a permit before you can build something. The main thing here is that if your token represents a right, like a share in a company or a debt obligation, it needs to be properly entered into a distributed ledger. This isn't just a suggestion; it's a legal requirement under the Swiss DLT Act. The law basically says that these rights, when they're put on a DLT, are treated similarly to how traditional securities are handled. This means you can't just whip up a token and expect it to be legally recognized without going through the proper channels. The act makes it clear that the entry into the DLT is what gives the token its legal standing in many cases. It’s all about making sure that when someone holds one of these tokens, their rights are clear and enforceable.
Technical and Organizational Measures
Beyond just the legal entry, the Swiss DLT Act also puts a spotlight on the tech and how you run things. Issuers need to have solid technical and organizational measures in place. This isn't just about having a fancy website; it's about making sure the whole system is secure and reliable. We're talking about things like:
- Data Integrity: Making sure the information recorded on the DLT is accurate and hasn't been messed with. This is super important for trust.
- System Availability: The DLT system needs to be up and running when people need it. You can't have investors locked out because the system is down.
- Security Protocols: Strong measures to prevent unauthorized access, cyber-attacks, and fraud. This is non-negotiable.
Basically, the law wants to see that you've thought through the practical side of running a tokenized system and have put safeguards in place to protect everyone involved. It’s a bit like making sure your bank has good security systems to protect your money.
The Issuance Agreement and Ledger Integrity
When you issue tokens, especially those representing financial instruments, there's often an issuance agreement involved. This agreement lays out the terms and conditions of the token issuance. The Swiss DLT Act emphasizes that this agreement, along with the integrity of the DLT ledger itself, is key to establishing the rights associated with the tokens. The ledger needs to be maintained in a way that guarantees its accuracy and immutability. Think of the ledger as the official record book – it has to be trustworthy. Any changes or updates to the token or the underlying asset need to be reflected accurately and securely on the ledger. This whole process is designed to provide legal certainty, so everyone knows where they stand.
The Swiss DLT Act aims to bridge the gap between traditional legal frameworks and the innovative nature of distributed ledger technology. By setting clear conditions for the issuance of DLT-based rights and requiring robust technical safeguards, it provides a foundation for secure and reliable tokenization. The focus on ledger integrity and clear issuance agreements ensures that token holders' rights are well-defined and protected within the legal system.
Navigating Compliance and Security
When you're dealing with tokenized real-world assets (RWAs) in Switzerland, or anywhere really, you can't just ignore the rules. It's not just about having cool tech; it's about making sure everything you do is above board. Think of it like building a house – you need permits and to follow building codes, or you'll have problems later. The same applies here, but with digital assets. Ignoring this stuff is a fast track to trouble.
Anti-Money Laundering (AML) Act Application
This is a big one. The Swiss AML Act is designed to stop criminals from using the financial system to hide dirty money. When you tokenize assets, especially those that can be easily traded or moved across borders, you've got to be extra careful. This means knowing who your customers are and keeping records of transactions. It's not always straightforward with digital assets, but the principles are the same. You need systems in place to flag suspicious activity and report it if necessary. This helps keep the whole system clean and trustworthy.
Know Your Customer (KYC) Obligations
Following on from AML, KYC is all about verifying the identity of the people you're doing business with. For tokenized assets, this means you can't just let anyone buy in without knowing who they are. You'll likely need to implement robust identity verification processes. This might involve collecting identification documents, checking against watchlists, and generally making sure you're not dealing with someone trying to hide their tracks. It's a necessary step to build trust and comply with regulations, especially when dealing with financial instruments that could be subject to Swiss DLT Act provisions.
Ensuring Data Integrity and Transaction Security
Beyond just knowing your customers, you've got to make sure the data itself is solid and that transactions are secure. Blockchain technology helps a lot here because it's designed to be tamper-proof. But you still need to think about how data is entered and managed. Are you using secure methods to record ownership? Are your smart contracts audited to prevent bugs that could be exploited? Protecting against cyber threats is also key. You don't want hackers getting in and messing with ownership records or stealing assets. It's about building a secure environment from the ground up.
The digital asset space moves incredibly fast. What's considered secure today might not be tomorrow. This means compliance isn't a one-time thing; it's an ongoing process. Regularly reviewing your security measures and staying updated on the latest regulatory guidance is super important. It's better to be proactive than to react to a problem after it's happened.
Here are some key areas to focus on for data integrity and security:
- Smart Contract Audits: Regularly have your smart contracts checked by independent experts to find and fix any vulnerabilities before they can be exploited.
- Secure Key Management: If you're managing private keys for tokenized assets, you need top-notch security protocols to prevent loss or theft.
- Data Encryption: Sensitive customer data and transaction details should be encrypted both in transit and at rest.
- Regular System Monitoring: Keep an eye on your systems for any unusual activity that could indicate a breach or attempted fraud.
Switzerland's Position in Global RWA Tokenization
Switzerland has really carved out a unique spot for itself in the world of tokenizing real-world assets (RWAs). It's not just about having a DLT Act; it's about how they've built a whole ecosystem that feels solid and trustworthy. When you look at other countries, Switzerland often comes up as the go-to place for legal clarity, which is a pretty big deal when you're dealing with something as new and complex as tokenized assets.
A Benchmark for Legal Clarity
One of the main reasons Switzerland stands out is its clear legal framework. The Swiss DLT Act of 2021 was a game-changer, legally recognizing ledger-based securities. This means that when you tokenize an asset, there's a solid legal foundation supporting it. It’s not just a digital representation; it has legal standing. This predictability is super attractive to businesses and investors who want to avoid the messy legal gray areas that pop up in other places. FINMA, the Swiss financial regulator, has also been pretty clear in how they classify tokens – payment, utility, and asset tokens. This structured approach helps everyone know where they stand.
Institutional-Grade Infrastructure
Beyond the laws, Switzerland has been building the actual infrastructure needed for serious RWA tokenization. Think about places like the SIX Digital Exchange (SDX). It’s not just a concept; it’s a functioning DLT trading facility. Plus, there's a strong network of law firms and custodians that really know their stuff when it comes to digital assets. This combination of a regulated exchange and specialized service providers creates an environment that feels ready for big, institutional players. It’s this blend of legal certainty and practical, high-quality infrastructure that makes Switzerland a leader.
Attracting Cross-Border RWA Projects
Because of its stable political and economic environment, along with its clear regulations, Switzerland is a magnet for cross-border RWA projects. Companies looking to tokenize assets and reach a global investor base often find Switzerland to be the most sensible starting point. It offers a neutral ground with a strong reputation, making it easier to attract international capital. The country's proactive stance on DLT means it's not just keeping up with global trends but often setting them, making 2025 a really interesting year for RWA development there.
Switzerland's approach to RWA tokenization is characterized by a deliberate and phased integration of new technologies within existing legal and financial structures. This has resulted in a robust framework that balances innovation with the need for investor protection and market stability.
Comparison with Other Jurisdictions
Tokenizing real-world assets (RWAs) isn’t just a Swiss thing. Other countries in Europe have taken big steps with their own legal frameworks, aiming to balance innovation and investor protection. Let’s look at how Switzerland stacks up against Luxembourg, Liechtenstein, and the broader EU approach.
Luxembourg's Fund Tokenization Environment
Luxembourg is widely known for its thriving investment fund ecosystem, and in December 2024, it introduced Blockchain Law IV. This law centers on using DLT for issuing, registering, and transferring dematerialized securities. It creates a secure legal environment for tokenized financial instruments:
- A control agent oversees real-time DLT transactions, helping keep processes transparent and trustworthy.
- It supports both traditional and native DLT asset issuance.
- Various custody options enable flexible setups for different project needs.
- Real estate is a key use case, especially for fractional ownership.
A quick comparison of features:
Liechtenstein's Token Container Model
Liechtenstein’s Blockchain Act (TVTG) takes a tech-neutral approach. Here, a “token” is legally seen as a container that can represent just about any right or asset, physical or digital. This makes the framework incredibly flexible:
- Tokens are containers—the law treats the digital representation and underlying asset separately, enabling clean legal transfers.
- The act defines and regulates different service providers (issuers, verifiers, custodians, etc.).
- Built-in compliance: strict anti-money laundering and registration rules.
Token issuers benefit from an approach that avoids bias toward specific blockchains and supports nearly any use case related to digital ownership.
- The model brings:
- Technology neutrality
- Defined roles for market participants
- Instant legal certainty for DLT assets
- Compliance-readiness built in
EU's MiCA and DLT Pilot Regime
The EU’s regulatory response comes with MiCA (Markets in Crypto-Assets Regulation) and the DLT Pilot Regime. Combined, these aim to set EU-wide standards for crypto-assets and tokenized securities:
- MiCA builds definitions and licensing rules for crypto-asset services and stablecoins.
- The DLT Pilot allows financial market infrastructures to trial DLT-based trading and settlement using tokenized securities.
- National regulators interpret these rules, which sometimes creates inconsistencies.
Key considerations for EU projects:
- Cross-border recognition is possible, but there’s still a patchwork of local approval processes.
- Secondary-market trading remains somewhat limited since major exchanges are just getting on board.
- Bankruptcy and custody rights depend on national law, not the blockchain rules themselves.
Projects that want to reach a broad investor base must be proactive in understanding both pan-European frameworks and the specific requirements of each country where they operate.
How Switzerland Compares
Switzerland remains the gold standard for legal clarity and cross-border credibility in RWA tokenization. Its DLT Act offers:
- Solidity for on-chain and off-chain legal claims
- Compatibility with global issuance structures
- Institutional-grade infrastructure
Other places—like Luxembourg and Liechtenstein—offer interesting features (EU market access, tech neutrality), but Switzerland’s mix of robust law, digital asset expertise, and international reputation keeps it at the top, especially for big or cross-border projects. Even as the EU and its neighbors catch up, Switzerland’s blend of clarity, experience, and readiness stands out—something worth remembering if you're thinking about launching your next tokenized asset project across borders. For more insight on the key challenges and practical strategies, have a look at these compliance hurdles for RWA tokenization insights.
Technological Advancements Driving Adoption
It's pretty wild how much technology has changed things for RWA tokenization, right? It feels like just yesterday we were talking about basic blockchains, and now we've got all these fancy tools making it easier and safer to tokenize real-world stuff.
Blockchain Infrastructure Improvements
The core of all this is, of course, blockchain. It's the distributed ledger that keeps everything honest and transparent. But it's not just the same old blockchain anymore. We're seeing faster transaction speeds, which is a big deal when you're dealing with lots of assets. Think about it – nobody wants to wait around for ages for a transaction to go through. Plus, the costs are coming down, making it more affordable for more people to get involved. And security? It's gotten a serious upgrade with better encryption and ways to protect all that sensitive asset data.
The Power of Smart Contracts
Then you've got smart contracts. These are basically self-executing agreements written in code. They automatically handle things when certain conditions are met, which cuts out a lot of the middlemen and potential for errors. For example, a smart contract could automatically pay out rental income from a tokenized building to all the token holders. It’s like having an automated system that just works, making everything way more efficient and trustworthy. As these contracts get more sophisticated, they can handle even more complex financial deals, which is pretty exciting for the future of tokenized assets.
Scalability Solutions for Increased Transactions
As more and more assets get tokenized, the systems need to be able to handle the load. That's where scalability solutions come in. Things like Layer 2 solutions are being developed to speed up transactions and lower costs even further. We're also seeing more work on making different blockchains talk to each other (interoperability), which is key for moving assets around smoothly. It’s all about making sure the technology can keep up with the growing demand and handle a massive number of transactions without breaking a sweat.
The ongoing improvements in blockchain infrastructure, the automation provided by smart contracts, and the development of robust scalability solutions are collectively making RWA tokenization not just possible, but increasingly practical and appealing for a wider range of assets and investors. It's a technological evolution that's really paving the way for broader adoption.
Challenges and Future Outlook
So, we've talked a lot about how cool RWA tokenization is, especially here in Switzerland. But let's be real, it's not all smooth sailing. There are definitely some bumps in the road we need to smooth out before this really takes off everywhere.
Addressing Regulatory Divergence
One of the biggest headaches is that rules aren't the same everywhere. What's perfectly fine in one country might be a big no-no in another. This makes it tough for companies that want to operate across borders. Imagine trying to sell a product that's legal in your town but illegal in the next – it's a mess. We're seeing different approaches, like how the EU is working with MiCA and the DLT Pilot Regime, while places like the US are still figuring out who's in charge, the SEC or the CFTC. It's a constant game of catch-up to make sure you're following all the right laws. Global cooperation is key to making this whole tokenization thing work on a larger scale.
The push for clearer rules globally is important. It helps traditional players feel more comfortable getting involved. Without that, it's like asking someone to invest in something they don't fully understand or trust because the rules are all over the place.
Market Accessibility and Investor Education
Even with the tech getting better, a lot of people still don't quite get what tokenization is all about. It's not just about having the coolest blockchain; it's about making sure regular folks and big institutions alike can actually use it and trust it. We need to make it easier for people to get involved, whether that's through simpler platforms or just better explanations. Think about it: if you don't understand how to buy or sell something, or why you even should, you're probably not going to. We need more than just a few tech-savvy early adopters; we need everyone on board.
Here are some things that need to happen:
- Clearer Explanations: Websites and materials need to explain tokenization in plain English, not just jargon.
- User-Friendly Platforms: The actual process of buying, selling, and managing tokens needs to be as simple as using your favorite banking app.
- Demonstrating Value: Showing real-world examples of how tokenization benefits investors, like increased liquidity or fractional ownership, is super important.
The Future of RWA Tokenization in Switzerland
Looking ahead, Switzerland is in a pretty good spot. They've been proactive with their DLT Act, which gives a solid legal foundation. This means companies can innovate with more confidence. We're seeing a lot of interest in tokenizing things like private equity and debt instruments, which are big markets. The country's reputation for stability and clear regulations makes it attractive for both local and international projects. It's not just about the tech; it's about having the right legal framework to back it up. As more countries catch up with their own regulations, Switzerland's early move could keep it at the forefront of this financial revolution. The integration with DeFi is also a big deal, opening up new ways to use these tokenized assets. We're seeing projects like Ondo Finance successfully tokenizing assets, which shows the real potential here. Tokenizing real-world assets is definitely changing the game.
Wrapping It Up
So, that's the lowdown on Switzerland's DLT Act and how it's shaping up for real-world asset tokenization. It's pretty clear that the country is making a serious effort to get ahead of the curve, creating a legal space where these new digital assets can actually function. While it's not exactly a free-for-all, the framework they've put in place seems designed to bring some much-needed clarity and security to the whole tokenization process. It’s definitely a space to keep an eye on as more projects start to take root and we see how this all plays out in the real world.
Frequently Asked Questions
What exactly is RWA tokenization?
Imagine you have something valuable in the real world, like a building or a piece of art. RWA tokenization is like turning that real thing into a digital token on a computer network called a blockchain. This makes it easier to buy, sell, and share ownership of that real-world item.
Why is Switzerland good for tokenizing real-world assets?
Switzerland has created clear rules for digital assets and blockchain technology. This makes it a safe and trustworthy place for companies to create and trade these digital tokens representing real things. They have laws that help protect everyone involved.
What is the Swiss DLT Act?
The Swiss DLT Act isn't a totally new law, but rather changes made to existing laws to include new technology like blockchain. It helps make sure that digital tokens and the rights they represent are legally recognized and protected, especially when dealing with things like trading and bankruptcy.
Are all tokens the same under Swiss law?
No, Swiss law looks at tokens differently. Some are like digital money (payment tokens), some give you access to a service (utility tokens), and others represent ownership of something real, like a share in a company or property (asset tokens). Knowing the difference is important for how they are treated legally.
What rules do companies have to follow when creating tokens in Switzerland?
Companies need to follow specific rules to issue tokens, especially those representing real assets. They must make sure the digital ledger where the tokens are kept is secure and that there are agreements in place that clearly explain the rights and how the system works. It’s all about making sure things are fair and safe.
Do I still need to worry about things like anti-money laundering (AML) with tokenized assets?
Yes, absolutely! Even though it's digital, companies still have to follow strict rules to prevent illegal activities, like money laundering. This means they need to check who their customers are (KYC) and make sure the transactions are legitimate. It's key for keeping the system trustworthy.
How does tokenizing real-world assets help investors?
Tokenizing assets can make them easier to buy and sell, which means more people can invest in things they couldn't before. It also allows for 'fractional ownership,' meaning you can buy a small piece of something expensive, like a building, making investments more accessible and potentially increasing how easily you can trade them.
What are some challenges with RWA tokenization?
One big challenge is that different countries have different rules, which can be confusing. Also, making sure everyone understands how these digital tokens work and trusts them takes time and education. Ensuring the security of the tokens and the systems they run on is also super important.
