Hong Kong-based GF Securities has unveiled the first tokenised security, Commercial Paper, compliant with local regulations and issued on the Ethereum blockchain.
Tokenization is the process of converting rights to assets into digital tokens on the blockchain. The benefits of tokenization, according to experts, include increased liquidity, fractional ownership, increased transparency, reduced transaction costs, improved access to assets and greater security thanks to blockchain technology.
“GF Securities’ initiative reflects the global trend towards tokenization of real-world assets (RWA), facilitating wider digitization of physical assets,” a GF Securities spokesperson said. Real estate asset tokenization is gaining momentum and is projected to reach $5,209.84 billion by 2027, growing at a CAGR of 7%.
GF Securities' announcement is closely related to a similar initiative by BOCI, the investment banking arm of the Bank of China. In partnership with UBS, they released tokenized banknotes on Ethereum in June 2023. These developments highlight Hong Kong's ambition to position itself as a leading hub for RWAs and security token offerings (STOs). Do not forget about the developed regulatory framework and investor-friendly environment.
The Securities and Futures Commission (SFC) of Hong Kong recently expressed its readiness to issue security tokens and invest in RWA. ABT Tech, a local blockchain firm, will provide technical support for tokenized commercial papers, ensuring a high level of security and transparency of transactions.
Ripple, an American blockchain payments company, also shares an interest in the growing tokenization industry. Last year, Ripple revealed its plans to transform the real estate sector through tokenization and active participation in Hong Kong's initiative to launch the e-HKD, a digital Hong Kong dollar.
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