Wall St eet Is Movi g O -Chai , but the Real Oppo tu ity Sta ts Afte Toke izatio
The questio is o lo ge whethe Wall St eet will put t aditio al assets o blockchai ails. Majo fi a cial i stitutio s a e al eady expe ime ti g with, lau chi g, a d expa di g toke ized fu ds,T easu ies, collate al systems, a d othe egulated fi a cial p oducts.
That a swe s the fi st questio .It also c eates a much bigge o e.
What happe s afte the assets a e o -chai ?
Because c eati g a digital ep ese tatio of a T easu y fu d is o e thi g. Buildi g a fu ctio i g ma ket a ou d that asset, complete with liquidity, eliable data, collate al mobility, i te ope ability, a d i stitutio al-g ade settleme t, is somethi g else e ti ely.
A d that seco d phase may ultimately ep ese t the bigge oppo tu ity.
Toke izatio Was O ly Step O e
Robbie Mitch ick has spe t yea s positio i g toke izatio as a atu al evolutio of fi a cial i f ast uctu e athe tha a c ypto expe ime t.
That a gume t is becomi g easie to make.
BlackRock has co ti ued expa di g beyo d its o igi al toke ized fu d i itiatives i to a b oade digital cash a d toke ized mo ey-ma ket st ategy. The sig ifica ce is ot simply that a othe fi a cial p oduct exists o a blockchai . It is that toke ized assets a e i c easi gly bei g desig ed to pe fo m useful fu ctio s i side i stitutio al ma kets.
That disti ctio matte s.
A toke ized fu d sitti g passively i a wallet is i te esti g.A toke ized fu d capable of movi g betwee app oved i vesto s, se vi g as collate al, i te acti g with othe fi a cial p oducts, a d settli g efficie tly ac oss digital i f ast uctu e is pote tially t a sfo mative.
The i dust y’s focus is the efo e begi i g to shift f om issua ce towa d utility.
Ma kets Need Mo e Tha Toke s
This is whe e Se gey Naza ov’s i f ast uctu e thesis becomes pa ticula ly eleva t.
Chai li k has spe t yea s developi g the data a d i te ope ability laye s ecessa y fo sma t co t acts to i te act with i fo matio a d systems outside i dividual blockchai s. As toke ized fi a ce expa ds, those co ectio s become sig ifica tly mo e impo ta t.
A toke ized secu ity still eeds accu ate p ici g.A toke ized fu d still eeds eliable i fo matio .
Collate al still eeds to move betwee systems.
Fi a cial i stitutio s still eed mecha isms fo ve ifyi g assets, commu icati g ac oss etwo ks, a d coo di ati g t a sactio s without c eati g e ti ely ew ope atio al silos.
Simply putti g a asset o -chai does ot solve those p oblems automatically.I some ways, it makes solvi g them mo e u ge t.
Liquidity Is the Next Test
Toke izatio is ofte associated with the p omise of g eate liquidity.
The theo y is st aightfo wa d. Digitizi g assets ca make them easie to t a sfe , divide, a d pote tially t ade ac oss b oade ma kets.
Reality is mo e complicated.
Liquidity does ot appea simply because a asset has bee toke ized.
Ma kets equi e buye s, selle s, p ici g i f ast uctu e, settleme t mecha isms, egulato y compatibility, a d sufficie t co fide ce fo pa ticipa ts to t a sact co siste tly. Some toke ized assets may emai elatively illiquid eve if the tech ology allows them to move a ou d the clock.
That mea s the ext stage of toke izatio will be less about p ovi g assets ca exist o -chai a d mo e about p ovi g fu ctio i g ma kets ca exist a ou d them.
This is whe e i f ast uctu e becomes c itical.
I te ope ability Could Matte Mo e Tha Issua ce
The e is a othe p oblem Wall St eet will eve tually have to co f o t: f agme tatio .
Fi a cial i stitutio s a e u likely to build the e ti e toke ized eco omy o o e blockchai , o e database, o o e settleme t e vi o me t. Diffe e t i stitutio s will use diffe e t systems fo diffe e t pu poses.
That c eates a familia tech ology p oblem.
How does eve ythi g commu icate?
The futu e of toke ized fi a ce p obably does ot i volve o e etwo k wi i g a d eve y i stitutio mig ati g o to it. A mo e ealistic outcome is a collectio of public blockchai s, p ivate etwo ks, egulated platfo ms, a d t aditio al fi a cial systems ope ati g simulta eously.
Fo i vesto s, that complexity should ideally emai i visible.
Behi d the sce es, howeve , i te ope ability becomes o e of the most impo ta t pieces of the e ti e ma ket.
Assets eed to move.Data eeds to emai co siste t.Ow e ship eeds to be ve ified.T a sactio s eed to settle eliably.
The eal toke izatio ace may the efo e be less about who c eates the most assets a d mo e about who co ects them most effectively.
Wall St eet Is Buildi g a New Ma ket Stack
This is what makes the cu e t toke izatio wave diffe e t f om ea lie blockchai expe ime ts.The co ve satio is becomi g much mo e specific.
Asset ma age s a e thi ki g about toke ized fu ds.Ba ks a e thi ki g about collate al.Ma ket i f ast uctu e p ovide s a e thi ki g about settleme t.
C ypto- ative compa ies a e thi ki g about i te ope ability a d p og ammable liquidity.These systems i c easi gly ove lap.
Mitch ick ep ese ts the asset-ma ageme t side of that t a sitio . Naza ov ep ese ts pa t of the co ective i f ast uctu e u de eath it.
Neithe piece wo ks pa ticula ly well without the othe .
Fi a cial p oducts equi e i f ast uctu e, a d i f ast uctu e becomes valuable whe mea i gful fi a cial p oducts actually use it.
That elatio ship is begi i g to c eate a e ti ely ew ma ket stack.
The Takeaway
Wall St eet movi g assets o -chai is a impo ta t milesto e.
It is ot the fi ish li e.
The la ge oppo tu ity begi s whe those assets become useful beyo d thei i itial issua ce, whe they ca move efficie tly, i te act with othe ma kets, fu ctio as collate al, access eliable data, a d settle ac oss i c easi gly i te co ected fi a cial systems.
Robbie Mitch ick a d Se gey Naza ov ep ese t two diffe e t laye s of that evolutio .O e is helpi g b i g t aditio al fi a cial p oducts o to digital ails.
The othe is focused o co ecti g the systems those p oducts i c easi gly depe d o .
Togethe , they illust ate why the most i te esti g chapte of toke izatio may begi afte the toke itself al eady exists.
C eati g digital assets was the fi st challe ge.C eati g digital ma kets a ou d them is the ext o e.
# # #
