Project Guardian: Tokenized Investment Vehicles for Asset and Wealth Management
Key highlights
Chetan Karkhanis, SVP Strategic Ventures, Franklin Templeton on tokenization and the role of interoperability:
- Interoperability is a critical issue in the tokenization space. Chetan emphasised that we are still in the early stages of decentralised finance (DeFi).
- The Benji Token, launched by Franklin Templeton, has launched over multiple chains. The move from a single blockchain to multiple chains shows the need for interoperability in tokenized assets.
- The shift to public blockchains (rather than private chains) brings significant benefits, including decentralization.
- While end clients may not directly see the benefits of interoperability, practitioners need to ensure that they can operate across multiple chains (EVM and non-EVM), similar to how the internet evolved with different browsers and protocols.
- Illiquid assets such as buildings, a crate of wine, or a money market fund can be tokenized - opening up access to everyday investors.
Khai Lin Sng, Co-founder & Chief Investment Officer, Alta Exchange on tokenization and exchange perspectives:
- Blockchain can easily provide access and liquidity for alternative assets through fractionalisation of assets. but that's not where she feels blockchain will actually yield the benefit that we are seeing from a mid to long term perspective. Fractionalisation of assets can still take place without the need for blockchain.
- However, as the settlement timeline of trading assets can be very long via a non-blockchain method, they turned to tokenization to improve efficiency.
Stephanie Law, Head Products South-East Asia, UBS Asset Management on Tokenization’s Impact on Asset Management:
- At UBS Asset Management, Stephanie has been closely involved in the tokenization of assets, including the launch of a tokenized VCC (Variable Capital Company). She emphasized that tokenization has the potential to transform the asset management industry.
- First, with this fast moving space in tokenization for traditional asset managers to take the leap, we need a lot of engagement with the regulators. UBS started talking to the MAS before they announced Project Guardian to try to understand how would we bring this into a VCC framework?
- Secondly, it's very important that we have secure, reliable infrastructure, especially those that can handle institutional transaction volumes.
- Thirdly, it will be market demand. It's not just about institutions and fund managers that are tokenizing. A lot of it depends on investor demand. And, without that, there's no point in doing it.
Conclusion:
While tokenization is still in its early stages, it holds great promise in transforming financial services by reducing costs, improving processing speeds, and democratising access to a wide range of assets. The ability to operate across multiple chains and the focus on interoperability will be crucial to ensuring tokenization's widespread adoption in the future.
Watch Full Session
Speakers:
- Chetan Karkhanis, SVP Strategic Ventures, Franklin Templeton
- Khai Lin Sng, Co-founder & Chief Investment Officer, Alta Exchange
- Stephanie Law, Head Products South-East Asia, UBS Asset Management
Moderator:
- Marita McGinley, Head of Digital Asset Strategy, Schroders