Tokenized stocks: opportunity or risk?
Tokenized Stocks and Nasdaq: Future or Risk?
Tokenized stocks are an innovative financial instrument that is becoming increasingly popular in the world of technology and investing. Among the leaders in this direction is Nasdaq, which is actively working on implementing blockchain technologies into the traditional financial market. But should this be seen as the future or as a source of potential risks, such as account blocking and sanction labels?
What Are Tokenized Stocks?
Tokenized stocks are digital assets that represent the right of ownership of a share in public companies. They are based on blockchain technology and smart contracts, making the process of buying, selling, and storing securities faster and more accessible. For example, the company Amundi recently launched tokenized shares of its investment fund on the Ethereum blockchain.
A key role in the development of the tokenized stock market is played by SEC approval (U.S. Securities and Exchange Commission). The regulator ensures that new instruments comply with established laws and minimizes the risks of illegal use, including money laundering through "dirty crypto."
Advantages of Tokenized Stocks on Markets like Nasdaq
- Transparency and Openness. Blockchain ensures the transparency of all transactions and eliminates the possibility of data falsification.
- Accessibility. Investors from different regions of the world gain the opportunity to participate in the stock market without the need for intermediaries.
- Cost Reduction. Fewer commissions compared to traditional brokers.
According to Matt Savarese, one of the leading figures in the field of tokenization, the total market capitalization of tokenized assets is already $36 billion and could reach $2 trillion by 2028.
Risks: Regulation and Blockages
Nevertheless, the rapid development of tokenized stocks is associated with a number of challenges:
- Account Blocking. Regulators and banks strive to prevent the use of tokenized assets for illegal operations, which can lead to the freezing of assets upon suspicion of violating AML screening rules (Anti-Money Laundering compliance analysis).
- Sanction Labels and KYC. Unverified addresses may be linked to prohibited transactions, leading to serious consequences, including the inability to execute deals.
- Regulatory Influence. The SEC and other supervisory bodies may tighten requirements for trading tokenized stocks.
According to experts, further interaction with regulatory bodies like the SEC and ensuring full transparency are critical steps for maintaining trust in the sector.
How to Protect Yourself: Tips for Investors
If you decide to invest in tokenized stocks, follow these recommendations:
- Check addresses before transferring. Use specialized blockchain scanners to ensure that addresses are not under sanction labels.
- Complete KYC. Ensure that the platform you are interacting with complies with regulatory requirements.
- Avoid dirty crypto. Carefully evaluate projects and avoid suspicious transactions.
Conclusion
Tokenized stocks are emerging at the intersection of two worlds—the traditional and the digital. Their potential includes disrupting established financial systems, but they also bring new risks, from regulatory requirements to the possibility of asset blocking. Nasdaq and other players, such as Standard Chartered and Amundi, are already making significant strides in this direction.
Nevertheless, the key to success will be not only the implementation of modern technologies but also the responsibility of the investors themselves. Keep an eye on innovations, but always stay focused on their possible consequences.