What is asset-backed tokens?

An asset-backed token is a type of digital token that represents ownership in a tangible or intangible asset, such as real estate, solar projects, or even intellectual property.

• The value of the token is tied to the underlying asset and can be traded on blockchain-based platforms.

• These tokens provide investors with fractional ownership in an asset, allowing them to gain exposure to traditionally illiquid or difficult-to-access markets.

• The use of blockchain technology ensures transparency and immutability of ownership, making asset-backed tokens a promising avenue for creating more efficient and accessible investment opportunities.

How others define asset-backed tokens

CoinMarketCap

Asset-backed tokens are digital claims on a physical asset and are backed by that asset. Gold, crude oil, real estate, equity, soybeans or just about any other real, physical asset can be tokenized and become an asset-backed token.

PwC

An asset-backed token derives its value from something that does not exist on the blockchain but instead is a representation of ownership of a physical asset (for example gold or oil).

EY

In the most abstract form, tokenization converts the value stored in tangible or intangible object into a token that usually can be manipulated along a DLT/Blockchain system.

In simple words, tokenization can turn almost any asset, either real or virtual, into a digital token and enables the digital transfer, ownership and storage without the necessary need of a central third party/intermediary...

Insider Monkey

For those unfamiliar, asset-backed tokens are blockchain-based units of value that are pegged to real-world assets, such as company shares, real estate, diamonds, or commodities. They represent a large subcategory of security tokens and allow users to hold ownership rights over a physical and tangible asset in a digital form.

TokenMinds

Asset-backed tokens are virtual entitlements whose value is based on tangible assets. With blockchain technology, property owners can tokenize the whole or part of their assets and receive decent compensation.

CoinDeck

Tokenization is the process of putting ownership of tangible assets, such as precious metals, on the blockchain, and offers the convenience of buying and selling these assets around the clock because the transactions do not involve traditional brokers.

Forbes Advisor

Tokens are digital assets stored on the blockchain database. They are created on blockchains that already exist, and typically represent an asset or provide the holder a specific service or access to an application. A token is a digital unit that represents an asset or utility.

Hedera

Asset tokenization is the process by which an issuer creates digital tokens on a distributed ledger or blockchain, which represent either digital or physical assets.

BNY Mellon

Fundamentally, tokenization is the process of converting rights – or a unit of asset ownership – into a digital token on a blockchain. Tokenization can be applied to regulated financial instruments such as equities and bonds, tangible assets such as real estate, precious metals, and even to Tokenization of Copyright to works of authorship (e.g., music) intellectual property.

Cointelegraph

The tokenization of assets is the process of issuing security tokens (a type of blockchain token) representing real digital tradable assets. Like an initial coin offering (ICO), security tokens are issued via a security token offering (STO) process, through which investors can buy payment, equity or utility tokens.

Blockchain Council

Security tokens are digital assets that derive their value from an external asset that can be traded. Security tokens are created as investments. Dividends in the form of additional coins are given to token holders each time the issuing company of the tokens earns a profit in the market.

UOB

Asset tokenization is the process of converting ownership rights in a particular asset into digital tokens. Each token is basically the representation of a proportional part of the digitized asset.

Chainlink

“Asset tokenization” is a term for the use of smart contract and blockchain technology to represent ownership or rights to an asset as a tradable, on-chain token. Though it most commonly refers to the tokenization of financial or fungible assets, such as shares in a company or a quantity of gold, asset tokenization can hypothetically refer to the tokenization of anything possessing monetary value.

Six

An asset token represents a right of ownership over an asset. Asset tokens make it possible to trade novel assets as well as existing assets (e.g. stocks, bonds, or mutual fund shares) in the form of security tokens on a digital securities exchange...

Deloitte

A security token is defined as an instrument that provides a right of ownership and an entitlement to a share of future profits or cash flows. For example, a token may represent partial ownership of a specific property or of a financial instrument such as governemtn bond or other debt security.

Organisation for Economic Co-operation and Development (OECD)

Tokenisation of assets can involve the representation of pre-existing real assets (financial instruments, a basket of collateral or real assets) on the ledger by linking or embedding by convention the economic value and rights derived from these assets into digital tokens created on the blockchain; or the issuance of tokens that are “native” to the blockchain, which are built directly on-chain and live exclusively on the distributed ledger.