Bonds and gold are top tokenisation targets

Bonds and gold are set to lead the way in large scale tokenisation, according to panellists at the Digital Commonwealth Summit.

A session on real world assets and tokenisation examined their prospects and posed panellists the question: which are the next assets that will be tokenised at scale?

Panellist Deepak Jassal, Partner at corporate advisory 01 Capital, identified fixed income markets as highly promising.

“I think the bond market is the safest. One of the simplest assets you can have is the straightforward IOU and they yield as well. That’s the one that the banks and institutions will push the fastest,” Jassal said.

BCB Group Co-founder and Chief Executive Oliver Tonkin agreed and said he saw another key asset as ripe for tokenisation.

“I would add gold to that because we have seen a few projects, and we could see a lot more, because it is a hedge. And there are lots of strategies around gold and bitcoin being combined,” Tonkin said.

Another area in mainstream investment highly suitable for tokenisation is money market funds, according to Tonkin. “It’s a massive market and you are beginning to see projects that are credible,” he said, adding that links could be made between money market funds and stablecoin allowing investors to flip quickly in and out of funds to access yield.

The potential for tokenisation of mainstream assets marks a major evolution from just a few years previously, Tonkin said: “We’ve been around for about eight years and about five or six years ago, people were coming to us wanting support for often crazy ideas, stuff like tokenised fast cars, art or stamps. It was just unnecessary. What we are seeing now is an evolution away from those stupid ideas and to projects with genuinely useful value-added.”