A study by the Official Monetary and Financial Institutions Forum (OMFIF) reveals most respondents believe significant tokenization will happen within 3 years.
According to the digital assets research by the Official Monetary and Financial Institutions Forum, 92% of participants think there will be a significant tokenization of the financial markets at some point.
“92% believe that financial markets will experience a substantial degree of tokenization at some point, although all said that it is at least three years away,” according to the survey, which included various market participants. Twenty-six organizations from Europe, Africa, Asia, and South America—including treasuries, banks, and asset managers—were polled by OMFIF.
Tokenization and blockchain have been heralded as the wave of the future by nations worldwide. 42% of respondents to a survey by research tank OMFIF said they believed blockchain would take the lead in financial market infrastructure. The digitalization of physical assets is known as tokenization.
On Tuesday morning, UK Finance declared that the tokenization platform, central bank digital currency (CBDC), and ledgers had finished its testing phase. Seven UK Finance and bank members, including Barclays, Citi UK, HSBC, and Natwest, took part in the trial.
The Bank for International Settlements, regarded as the central bank of central banks, announced on Monday that it had partnered with 40 carefully chosen companies to investigate tokenization.
According to OMFIF, 65% of respondents said that bonds had the highest likelihood of becoming tokenized. On the blockchain, bonds are already being tokenized. As of July 31, 2023, 14 blockchain bonds valued at $1.2 billion had been issued. This is nearly equal to the 16 bonds valued at $1.7 billion in 2023.
Widespread testing has also been done on wholesale CBDCs, digital tokens issued by central banks, and intended only for usage by institutions.
“Our survey finds that market participants prefer wholesale central bank digital currencies over other forms of tokenized cash,” the paper stated. “However, effective adoption will depend on robust regulation.”