How tokenisation unlocks ‘US$3 trillion opportunity’ in Asia’s retail investment market

Private firms are exploring tokenisation of real-world assets such as carbon credits as a means to open up niche markets to millions of small retail investors

On-chain asset tokenisation in Asia is projected to become a US$3 trillion market opportunity, owing to strong interest and demand in the region, analysts say

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People at the 30th Art Taipei exhibition in Taipei, Taiwan, on Friday. Asian financial hubs are looking to tap a potentially rich new vein of investment opportunity – digital tokens for real-world assets such as carbon credits and art. Photo: EPA-EFE

Published: 8:30am, 30 Oct 2023Updated: 6:14pm, 30 Oct 2023

Asian financial hubs are looking to tap a potentially rich new vein of investment opportunity – digital tokens for real-world assets such as carbon credits, palm oil, premium wine and even art.

Private firms are actively exploring tokenisation as a means to open up such niche markets to millions of small retail investors.

“So if you think about art today, the process of buying art and investing in art is very difficult,” said Stephen Richardson, managing director, financial markets and head of APAC at digital-asset infrastructure-provider Fireblocks, explaining that only a few wealthy investors buy art and either hold on to it or sell it via auction houses.

“That art can be fractionalised – you can take a piece of that art that was worth US$10 million and break it up into a thousand tranches, which would allow a retail investor, if they are a huge fan of art, to buy into that art,” he said.

Digital tokens essentially encapsulate a set of data that can be traded on blockchains, which supports say makes it harder to tamper with and transactions are near instantaneous. Photo: Shutterstock

Digital tokens essentially encapsulate a set of data that can be traded on blockchains – decentralised, distributed digital data ledgers shared across a network of computers. Advocates say this makes tampering transactions, which are almost instantaneous, much more difficult.

Transactions can be automatically recorded on the blockchain, and the immutability and transparency enabled by blockchain technology helps guarantee the authenticity of each token’s stated history.