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At the Dubai World Token Summit, Cointelegraph spoke with Jeremy Foerster, global head of partnerships at the Cardano Foundation; Meng Chang Shu, head of business development at Ras Al Khaimah Digital Assets Oasis (RAK DAO); and Ellis Wang, who works with the executive and advisory group in the personal account of Sheikh Saeed bin Ahmed Al Maktoum.
The group explored various topics related to tokenization. These include the benefits associated with the digitalization of assets and the challenges that organizations may face in navigating the tokenization space.
At the recent World Token Summit 2023 event held in Dubai, the group discussed how tokenization adoption could be scaled up through various tools such as address tracking and forensic analysis.
Opening the panel, Foerster emphasized that the benefits of tokenization lie in the creation of utilities. According to the executive, tokenization brings benefits by providing a tool for access, distribution of funds and fragmentation of assets. He explained that:
“What tokenization represents is the ability to capture the digital identity of an asset, its ownership, its value, and its history.”
In addition to the topic, Wang, who also previously worked in the banking sector, emphasized that one of the main benefits of tokenization is the transparency and security that are inherent features of blockchain. By putting records on the blockchain, the CEO believes that the tokenization of real assets naturally gives them various benefits, such as the flexibility provided by smart contracts.
On the subject: Digitalization will not replace commercial banks’ money anytime soon: Moody’s
While talking about its benefits, the executive also acknowledged that organizations have challenges with the wave of tokenization. With so many new technologies, it can sometimes be very difficult to keep up with the times, Wang said.
In addition, measures such as “know your customer” (KYC) and “know your transaction” (KYT), which ensure that funds do not come from illegal sources, add another layer to the various problems that the space has to face. Despite this, the CEO still believes that tokenization is a great opportunity for many industries.
In addition to the conversation, Firster said that forensic analysis can really help in scaling up adoption. The chief executive said the space has reached a point in time where address tracking to very large objects is possible. He explained that:
“It’s all about the rules of how many previous transactions they need to look at to make sure those funds are clean and understandable for use within the trade finance model.”
Firster emphasized that in doing so, the question “what information must be embedded in tokenized assets in order to qualify?” is appropriate. Giving an example, the panelist talked about tokens pegged to real estate and said that there should be a way to determine on-chain if an asset is indeed pegged to an asset off-chain. “So when we talk about digital signatures, we need to have a built-in identity solution that is also part of KYC,” he said.
Meanwhile, Shu agreed with the other participants in the discussion. The leader talked about what the community should focus on when working with tokenization. “You have to make sure that ‘that’ token serves a purpose,” he said. The Executive Director noted that this goal must be kept in mind. Shu also urged the community that despite the challenges they may face as the world moves towards tokenization, they should just “keep building”.