5 Advantages of Tokenising the Real World

In recent years, tokenisation has become a buzzword in the world of finance and investment.



Tokenisation is the process of converting a real-world asset into a digital token that can be traded on a blockchain network. Real-world assets can include anything from real estate to art to commodities and stocks. The tokenisation process transfers rights from a physical, financial, or intellectual asset into a digital token. Furthermore, tokenising assets creates more transparency due to the data trail it produces, which can be easily tracked and monitored.

Building digital assets via tokenisation requires a deep understanding of cryptography, specific financial laws, and technical skills to deploy secure, compliant, and working asset-backed tokens. There are so many benefits of tokenisation for real-world assets, so let’s go over the most significant advantages.

Increased Liquidity

One of the most significant benefits of tokenisation is increased liquidity. Traditional assets like loans, real estate and art can be illiquid, which means they are challenging to sell quickly. However, by tokenising these assets, they become tradable 24/7 on a global market, providing investors with greater flexibility and liquidity.

This liquidity can also increase the value of the underlying asset, as it becomes easier to trade and, therefore, more attractive to investors.

Fractional Ownership

Another benefit of tokenisation is fractional ownership. By dividing a real-world asset into smaller digital tokens, investors can own a fraction of the asset. This makes it easier for investors to invest in high-value assets which they may not have been able to afford otherwise. It also provides a new level of accessibility, as investors can own a portion of an asset with a much smaller investment, increasing overall market participation.

Increased Transparency

Tokenisation provides increased transparency compared to traditional assets. The use of blockchain technology means that transactions are recorded on a decentralised ledger that is transparent and immutable. This transparency provides investors with greater confidence in the integrity of the transaction, as all parties can see the history of ownership and the current ownership structure of the asset.

Lower Transaction Costs

Tokenisation also offers lower transaction costs compared to traditional assets. In the traditional market, there are many intermediaries involved in the buying and selling process, each of whom takes a commission. However, with tokenisation, transactions can be done on a blockchain network without the need for intermediaries, significantly reducing transaction fees.

Access to New Markets

Finally, tokenisation provides access to new markets. Digital tokens can be traded globally, providing investors with access to a broader range of markets than traditional assets. This global accessibility can help investors to diversify their portfolios and reduce risk.

Smart contracts play a critical role in tokenisation by defining the rules and conditions of the token sale and transfer. The smart contract is programmed to automatically execute the terms of the agreement, such as the transfer of ownership, payment of dividends, or distribution of profits.

Smart contracts enable tokenisation to be transparent, secure, and efficient. All transactions are recorded on a decentralized ledger, which ensures that the ownership and transfer of tokens are transparent and verifiable. Smart contracts also ensure that the rules and conditions of the token sale and transfer are automatically enforced, which reduces the need for intermediaries and eliminates the risk of fraud or errors. This can also reduce transaction costs, processing times, and errors.

Overall, smart contracts are a critical component of tokenisation, enabling the creation and management of digital assets that can be traded and owned by anyone, anywhere in the world.

In conclusion, the benefits of tokenisation of real-world assets are clear. Tokenisation has the potential to be a true disruptor with the potential to transform existing asset life cycles, accelerate product innovation and create hyper-personalised options for investors.

With the increasing adoption of blockchain technology and the growing interest in digital assets, we can expect to see more tokenised assets in the future, providing investors with new opportunities and benefits.


Until next month,

Calvin Ng

Managing Director


Important information

This information is for accredited, qualified, institutional, wholesale or sophisticated investors only and is provided by Aura Group and related entities and is only for information and general news purposes.  It does not constitute an offer or invitation of any sort in any jurisdiction. Moreover, the information in this document will not affect Aura Group’s investment strategy for any funds in any way. The information and opinions in this document have been derived from or reached from sources believed in good faith to be reliable but have not been independently verified. Aura Group makes no guarantee, representation or warranty, express or implied, and accepts no responsibility or liability for the accuracy or completeness of this information. No reliance should be placed on any assumptions, forecasts, projections, estimates or prospects contained within this document. You should not construe any such information or any material, as legal, tax, investment, financial, or other advice. This information is intended for distribution only in those jurisdictions and to those persons where and to whom it may be lawfully distributed. All information is of a general nature and does not address the personal circumstances of any particular individual or entity. The views and opinions expressed in this material are those of the author as of the date indicated and any such views are subject to change at any time based upon market or other conditions. The information may contain certain statements deemed to be forward-looking statements, including statements that address results or developments that Aura expects or anticipates may occur in the future. Any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected in the forward-looking statements. This information is for the use of only those persons to whom it is given. If you are not the intended recipient, you must not disclose, redistribute or use the information in any way.

Aura Group subsidiaries issuing this information include Aura Group (Singapore) Pte Ltd (Registration No. 201537140R) which is regulated by the Monetary Authority of Singapore as a holder of a Capital Markets Services Licence, and Aura Capital Pty Ltd (ACN 143 700 887) Australian Financial Services Licence 366230 holder in Australia.


Similar posts

Get the Latest News & Insights from Aura Group

Subscribe to News & Insights to stay up to date with all things Aura Group.