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Major financial institutions like JPMorgan, Goldman Sachs and Citigroup are developing private blockchain networks that offer some of blockchain's promised benefits. These private or "permissioned" systems give institutions more control while still providing the following: ▶️ Internal transparency: Transactions between departments and subsidiaries can be tracked and verified instantly. ▶️ Operational efficiency: Automated settlement and clearing processes cut down on the time and costs for international transfers, trade finance, and securities trading. ▶️ Selective data sharing: Banks can share specific transaction data with regulators or partners while maintaining confidentiality of sensitive information. ▶️ Smart contract automation: Standardized agreements and processes can be executed automatically, reducing manual processing and potential errors. https://lnkd.in/d422484

While cryptocurrencies initially brought blockchain into the spotlight, advocates say its true potential lies in its ability to transform core banking operations. From reducing settlement times and costs in cross-border payments to streamlining KYC processes and enabling smart contracts, blockchain could solve longstanding banking inefficiencies. https://lnkd.in/gtFReYdr

Industries which are being transformed by blockchain: * In finance, blockchain is revolutionizing how we handle payments and trade. * Real estate is seeing changes with blockchain through property tokenization. * Supply chains are becoming more transparent and efficient with blockchain. * Healthcare is using blockchain to secure patient data and improve operations. https://lnkd.in/gdpY2bsD

The tokenization of real-world assets (RWAs) represents one of finance's most transformative innovations. By converting ownership rights into digital tokens on a blockchain, this technology bridges traditional finance, real assets, and the decentralized world. Industry analysts project the RWA market could expand dramatically within the next decade, potentially reaching $10-15 trillion. Major institutions are accelerating this transformation.

By 2030, real estate is predicted to account for around one-third of the tokenized asset market (According to Statista), making it the most prevalent category. A real estate token can represent a variety of different fractional real estate interests—from a portion of a real estate deed, which could be in the form of a coop or a condo, or a standalone home or an office building built on land subject to a long term lease etc.; to an equity interest in a legal entity (such as an LLC or Trust as in the case of REITs); or ownership of collateralized debt that could be located in different geographic locations or subject to a variety of different laws and taxes. https://lnkd.in/eQp6sBKf

Boston Consulting Group predicts RWA tokenization will be “the third revolution in asset management." The mass adoption of tokenized real-world assets may be led by bonds, because their structural features make them ideal for blockchain issuance. Bonds, which are essentially debt instruments with a fixed maturity date, have three main characteristics that make them well-suited for tokenization: recurring costs that can be reduced by tokenization; complexity, which can be automated by smart contracts, and collateral usage, which can be facilitated by on-chain transfers. https://lnkd.in/eVvKbr9C

The digital representation of physical assets on public blockchains, including real estate, precious metals and artwork, has now expanded into the world of traditional finance products such as private credit, bonds, private equity and debt instruments such as treasury bills. With heavy hitters such as BlackRock, Goldman Sachs, Franklin Templeton, MakerDAO and others paving the way, the RWA sector outperformed all other crypto sectors in asset growth in Q2 of 2024.

Tokenization enthusiasts in traditional finance might be surprised to hear that over $1.5 trillion worth of repurchase agreements and other forms of securities financing are executed monthly using private blockchains.

Tokenization not only facilitates fractional ownership of physical and intangible assets, but also enhances liquidity, as tokens can also be traded on secondary markets. This innovation opens up new avenues for investors and provides owners with quicker access to capital.

Real-world assets (RWA) tokens grew nearly 28% on average during the second quarter, outshining other crypto sectors. The only crypto sector that showed a positive performance along with the RWA tokens is the centralized exchanges’ tokens, with roughly 7% growth. https://lnkd.in/gJJ9fqsh