TOKENIZATION

Tokenization in blockchain refers to the process of converting real-world assets, such as real estate, stocks, bonds, or commodities, into digital tokens that exist on a blockchain. These tokens represent ownership rights or claims on the underlying asset and can be traded or transferred seamlessly on decentralized networks. One of the key benefits of tokenization is that it allows for **fractional ownership**, meaning investors can purchase a fraction of a high-value asset like real estate, which increases accessibility and liquidity. By enabling the division of assets into smaller, tradable units, tokenization democratizes access to investments traditionally limited to large institutional investors.

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Furthermore, tokenized assets benefit from **blockchain’s transparency**, immutability, and security features, reducing fraud and improving trust among participants. Smart contracts can automate processes such as dividend payments, transfers, and compliance checks, which enhances efficiency and reduces the need for intermediaries in asset transactions. Additionally, tokenization offers near-instantaneous settlement of trades, lowering transaction costs and delays that are common in traditional asset management systems. However, the widespread adoption of tokenization faces regulatory challenges, as authorities are still determining how to classify and govern tokenized assets. Despite these hurdles, tokenization holds the potential to revolutionize asset management, making markets more efficient, transparent, and inclusive.