Setting the stage for asset tokenisation - TheEdgeMalaysia

This article is taken from https://theedgemalaysia.com/node/767819

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KUALA LUMPUR (Aug 23): Asset tokenisation is still at an early stage of development in Malaysia, even though it has been a number of years since digital assets went mainstream. Local regulators are looking to narrow the gap and exploring opportunities in this space with a view to creating greater market value.

Tokenisation is the process of creating a unique digital representation of an asset on a blockchain network. It is able to combine different applications and features to create new systems, while all legs of the transactions — such as payments and the transfer of ownership — are executed simultaneously.

In Malaysia, the potential value of tokenised assets is anticipated to reach US$43 billion (RM181.78 billion) by 2030, according to a white paper, titled “Project Juara: Malaysia’s Asset Tokenisation Opportunity”, published by Kenanga Investment Bank Bhd (KL:KENANGA) and jointly authored by Saison Capital Pte Ltd, Helicap Labs Pte Ltd and Satori Research Ltd.

This estimate represents a 72% jump from the tokenised asset market size of US$25 billion as at Aug 7 this year, suggesting tremendous growth potential. In 2020, the tokenised asset market value stood at only US$50 million.

In view of growing market interest in asset tokenisation, the Securities Commission Malaysia had in May published a consultation paper seeking public feedback on a proposed framework for tokenised capital market products.

“Overall, the respondents were largely supportive of the tokenisation approach, recognising the benefits of tokenisation and expressing strong support for the development of tokenisation guidelines for regulatory clarity. We have also observed varying levels of familiarity with tokenisation and blockchain technology, as well as their applications,” a spokesperson for the regulator tells The Edge.

However, there are some challenges faced by the local players. Grab a copy of The Edge Malaysia weekly today to read more.

Our Wealth pullout also takes a closer look at the local asset tokenisation wave, especially how local players are positioning themselves to ride the tokenisation opportunities.