This German bank will release a blockchain-based tokenization platform
Blockchain tokenization has gained more traction in the financial industry recently. It allows people to convert their ownership rights or assets into digital forms to secure them. In the latest development, German generational bank DekaBank revealed plans to release its blockchain-based tokenization platform next year.
But according to the details, the focus is not on regular crypto-assets like Bitcoin, but on mutual funds and stocks.
DekaBank collaborates with Metaco to launch its blockchain-based platform
DekaBank is partnering with Metaco, a digital asset management company, as they plan to launch the platform in 2024. After entering into the partnership agreement, the two parties have announced the move on January 31, 2023. The partnership will launch Harmonize, the blockchain-based core platform that provides institutional digital assets.
According to Andreas Sack, head of digital asset custody at DekaBank, the 105-year-old German bank will use this year to prepare the infrastructure. He noted that the platform is expected to launch the leading smallest sustainable product the firm offers in its crypto custody solution. Also, while the platform will fully launch next year, they will conduct the first test transaction in 2023.
Furthermore, Sach revealed that the new infrastructure focuses on different areas. DekaBank is targeting the tokenization of bonds, shares and other funds that will open up a new token economy.
The executive mentioned that the firm is taking its management solution to another level as it includes tokenized assets on multiple blockchains. He labeled the firm as the key provider of the new token economy.
He acknowledged that several blockchains, such as Ethereum and Polygon, are already undertaking the industry’s tokenization process. However, he is unsure whether existing networks will appear as standard in their idea.
Additionally, Sack explained DekaBank’s decision not to trade cryptoassets in partnership with Metaco. The manager indicated that the bank is only interested in regulated products, as it is under the regulation of the German Electronic Securities Act.
Sack also stated that while some jurisdictions regulate crypto assets, some still have no regulations. Therefore, such differences in jurisdictional regulation pose risks that will affect their business and implicate them as a company.
Tokenization and blockchain technology
Tokenization is used for various purposes involving blockchain technology. These include fungible tokenization, where the tokens are identical and interchangeable, and non-fungible tokenization, where tokens can represent ownership of assets. There is also governance tokenization and utility tokenization, where tokens offer decision rights and access to specific products and services respectively.
The remarkable benefits of blockchain applications are many. It helps to secure the ownership rights of crypto-assets, improve liquidity and secure convenient financial transactions.
Featured image from Pixabay, chart from TradingView.com
