According to sources Cointelegraph recently spoke with, the merging of decentralized finance (DeFi) with traditional assets has been hampered by a lack of infrastructure and regulatory standards around the world.
“It just didn’t have a good institutional level system for these companies to engage with. .”
Tokenization is a path to fragmentation, allowing multiple people to own portions of an asset that previously had to be sold for a higher value as a whole.Big Four PwC predicts global assets under management to reach $145.4 trillion by 2025, a huge market Be expected Welcome more investors and increase the liquidity of assets through tokenization.
Institutional investors managing this capital around the world want “services that work well with what they already do, are easy to implement, flexible and upgradeable.”
Polygon says it has worked with many of these global players. In January, investment firm Hamilton Lane announced the first of three Polygon-backed tokenized funds, bringing a portion of its $824 billion of assets under management on-chain. By tokenizing his flagship equity opportunity fund, Hamilton Lane was able to reduce the minimum investment requirement from an average of $5 million to $20,000 for him.
A portion of the recently closed Equity Opportunity Fund V has been @Securitization tokenized feeder fund @0xpolygon. learn more: https://t.co/ZxfaNJwgBx pic.twitter.com/4SOezI2Ma2
— Hamilton Lane (@hamilton_lane) January 31, 2023
Another example is JP Morgan. In November, the American giant executed its first cross-border DeFi transaction on a public blockchain, an initiative part of a pilot program to explore the potential of his DeFi in the wholesale funding market. bottom. The deal was also made on the Polygon network.
Despite recent progress in integrating DeFi into traditional markets, lack of regulatory clarity continues to prevent many from adopting emerging technologies. , are: What are securities The U.S. Securities and Exchange Commission has argued that through enforcement action, the definition could apply to a wider range of assets and services than many cryptocurrency companies had anticipated. As Butler asked:
“If we tokenize a security, will the digital token be the security itself, or just represent the security?”
Jez Mohideen, co-founder and CEO of Laser Digital, the cryptocurrency arm of Japanese bank Nomura, believes the lack of regulation is affecting digital asset risk management.
“Certain parts of the business specifically require more regulation, such as ensuring that individuals with fiduciary duty are in control of their capital. Institutional interest will grow,” he told Cointelegraph.
