Proof that Tokenization is a real trend

Dr. Joachim Schwerin is Principal Economist at the European Commission, and his mission is to promote the development of the tokenized economy and distributed ledger technologies, as well as their applications for industry and SMEs. In a recent interview on the Token City show, Dr. Schwerin offered a detailed and highly promising view on the future of the tokenized economy.

Here are the main points:

Digital transformation through tokenization

Can we imagine a world where real estate and other high-value assets are as liquid as stocks on the stock exchange? Schwerin answers by defining tokenization as the transformative process of converting physical assets into digital representations using blockchain. This not only simplifies transactions that are traditionally complex and time-consuming, but democratizes access to investments that were previously out of reach for many.

How? By reducing entry costs so that small investors can jump right in and trade directly. Reducing intermediaries automatically reduces traditional costs.

A new regulatory horizon

At the heart of the European Commission's strategy is the “Pilot Regime”, a regulated Sandbox designed to allow multilateral trading platforms to operate with DLT settlement systems (or in other words, trading systems where transactions are executed on blockchain technology).

This innovative approach adjusts the existing regulatory framework to encourage innovation while maintaining security and transparency standards.

The future is already here

Blockchain technology is not just a future promise, but a developing reality that is redefining the foundations of how we manage and value assets.

Schwerin is optimistic about the continued adoption and evolution of tokenization. He sees this advancement as not only optimizing transactions but also broadening access to capital and asset ownership.

A prime example is non fungible tokens (NFTs), which have revolutionized the way digital artwork is bought and sold, providing a clear and unaltered record of ownership thanks to the blockchain.

This demonstrates that tokenization not only facilitates more efficient transactions, but also creates entirely new markets and innovative forms of economic exchange.

Digital euro and beyond

The debate about a digital euro is more pertinent than ever. While the European Commission explores this possibility, the infrastructure and policy decisions are still in the pipeline. Schwerin suggests that any implementation would initially be conservative. At the same time, it raises a crucial question: are we prepared for the revolution that a digital euro could bring in terms of payments and microeconomic transactions?

While initial implementation may be conservative, the long-term impact could be transformative, facilitating faster, safer and more efficient transactions across the entire European economy.