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In recent years, blockchain-based tokenization has succeeded in making real estate much efficient, accessible, and affordable to the investors. And many experts believe that tokenization is the key to transform the industry into the next level. If you're a property owner, or an investor looking for an opportunity to invest in real estate, this article will jot down the 3 W's of tokenization of real estate, i.e what is tokenization? Why should you tokenize? and where to tokenize your real estate? So let's go ahead and find out.

"The recent proposal for reversible Ethereum transactions is one of the latest additions to this conversation. Stanford researchers proposed that there could be a reversible version of the common token standards ERC-20 and ERC-721, whereby a token creator could choose to configure their token to follow this standard. The idea put forward was that transfers of such a token should be reversible (if a group of arbitrators authorizes the reversal, and as long as it happens within a certain "grace period"). It seems the primary motivation of this proposal is to protect users from themselves. We all know that one wrong digit can send tokens and crypto into the abyss. If a novice user (or indeed, at times, a more au fait crypto enthusiast) mistakenly transfers their tokens to the wrong address, through this proposed update, they could appeal the error to arbitrators and potentially get their tokens back. "

The BIS published a primer on tokenization and its key elements. Tokenization can reap gains through transaction automation and new types of asset transfer, but it raises economic, legal and technical issues. These challenges define a "tokenization continuum" that represents the trade-offs involved in the tokenization of different kinds of traditional assets. The tokenization continuum suggests that where tokenisation is easiest, per-unit gains are likely to be modest. Efforts that concentrate initially on identifying the assets that are most suitable for tokenization may yield the largest benefits, especially when the asset is traded in large volumes.

The TTF is a Composition Framework. You can use the framework to decompose existing Tokens to identify its parts and if they don't exist in the TTF, you add them. You also use the TTF to define a new token by building as much of the token from the parts that are in the TTF and if you find something missing or could be improved, you add or update it. The more times this process is done makes the TTF better. The more industries and organizations use the TTF it becomes cross industry allowing tokens to be designed to work together. Like Insurance and Finance for documents tokens like a Title or Invoice."

Amazon customers in 12 countries will have their stored MasterCard card credentials tokenized. By replacing a consumer's physical card number with a token, payment information is unique to each individual transaction and can be used only by the merchant that requested it. The Mastercard Digital Enablement Service (MDES) tokenization technology keeps cards seamlessly up to date, because network tokens do not expire. When consumers receive a new physical card from their bank, their credentials are automatically updated. https://www.finextra.com/pressarticle/82935/amazon-joins-mastercard-tokenization-initiative

Citibank launched two "Citi Token Services" digital asset solutions that target institutions. One is a pilot for blockchain-based tokenized deposits, enabling organizations to move money between Citi branches worldwide and 24/7. The other is a trade application that uses smart contracts to trigger instant payments using tokenized deposits. Citi Token Services is separate, but complements the Citibank-founded Regulated Liability Network (RLN), a multi bank collaboration for digital assets, tokenized deposits and CBDCs. https://www.citigroup.com/global/news/press-release/2023/citi-develops-new-digital-asset-capabilities-for-institutional-clients

"This paper examines the financial stability risks associated with tokenized cash, a subset of stablecoins fully reserved with cash and cash equivalents. Using a combination of on-chain data together with uniquely collected wallet address labels, we construct empirical measures of liquidity ratios and run off rates on the largest cash token and characterize its users and their behavior. The overall circulation of tokenized cash is largely insulated from crypto price movements, though price changes correlate with re-balancing between smart contracts and private wallets. A liquidity ratio calculation, similar in concept to Liquidity Coverage Ratio (LCR), indicates that tokenized cash has at least two times the amount of High-Quality Liquid Assets (HQLA) when compared to the worst observed gross outflow over 30-day ahead periods. We discuss the implications of tokenized cash on safe asset creation, credit supply, and monetary policy transmission. The adoption of tokenized cash can reduce moral hazard risks from public guarantees and expand credit provision through market-based lending enabled by smart contracts."

"The UTXO design of Bitcoin exhibits partially characteristics of a token-based system and partially characteristics of an account-based system. A discussion on the difficulty to implement the economic notion of tokens in the digital domain, along with an exposition of the design of UTXO, is given in order to discuss why UTXO-based systems should be viewed as account-based according to the classical economic notion. Besides, a detailed comparison between UTXO-based systems and account-based systems is presented. Using the data structure of the system state representation as the defining feature to distinguish digital token-based and account-based systems is therefore suggested. This extended definition of token-based systems covers both physical and digital tokens while neatly distinguishing token-based and account-based systems."

"This paper examines the financial stability risks associated with tokenized cash, a subset of stablecoins fully reserved with cash and cash equivalents. Using a combination of on-chain data together with uniquely collected wallet address labels, we construct empirical measures of liquidity ratios and run off rates on the largest cash token and characterize its users and their behavior. The overall circulation of tokenized cash is largely insulated from crypto price movements, though price changes correlate with re-balancing between smart contracts and private wallets. A liquidity ratio calculation, similar in concept to Liquidity Coverage Ratio (LCR), indicates that tokenized cash has at least two times the amount of High-Quality Liquid Assets (HQLA) when compared to the worst observed gross outflow over 30-day ahead periods. We discuss the implications of tokenized cash on safe asset creation, credit supply, and monetary policy transmission. The adoption of tokenized cash can reduce moral hazard risks from public guarantees and expand credit provision through market-based lending enabled by smart contracts. "

Fnality sees the new Bank of England omnibus accounts as supportive of the opportunity to use tokenized cash assets on next generation payment systems, enabling on-chain wholesale exchange of value. Fnality uses an Etheruem-based permissioned blockchain developed by Clearmatics, that will run on chain payment systems in multiple currencies with a regulated subsidiary in each jurisdiction. When a bank wants to use Fnality tokens to make a payment, it transfers money from its central bank account to the Fnality omnibus account, which then tokenizes it. The bank then uses the tokens to make a payment, and the recipient bank can then opt to convert the received tokens back to central bank money and have it transferred to its own central bank account. Or it could use the tokens for further payments.

The OECD published a paper on asset tokenization; the digital representation of real (physical) assets on distributed ledgers, or the issuance of traditional asset classes in tokenized form. It examines the benefits of tokenization and the challenges to its wider adoption, and the potential disruptive effect on trading, liquidity, pricing, clearing and settlement. It also highlights the increased importance of a trusted and credible central authority in a tokenized environment (such as a custodian), and sheds light to the possible necessity for a tokenized form of central bank digital currency or stablecoin for the payment leg of security settlement on DLT-based trading venues.

This Fed paper reviews how the cryptocurrency community has approached the concepts of tokens and tokenization, and discusses "tokens" in the context of CBDC. By highlighting how the terms "tokens" and "accounts" are used by the cryptocurrency community and the central banking community, this note seeks to inventory the subtly and sometimes obviously different ways these common terms are being used by different people to reference different concepts. Misalignment of this ambiguous terminology could create issues for legal frameworks and oversight regimes for digital currencies and so-called tokenized financial markets.

A paper by Robeco's Laurens Swinkels examined the financial and economic consequences of tokenizing 58 residential rental properties in the US, particularly those in Detroit. Tokenization aims at fragmented ownership. He found that the residential properties examined have 254 owners on average. Investors with a greater than $5,000 investment in real estate tokens, diversified their real estate ownership across properties within and across the cities. Property ownership changed about once yearly, with more changes for properties on decentralized exchanges. He reported that real estate token prices moved according to the house price index; hence, investing in real estate tokens provided economic exposure to residential house prices.

"In this paper, we analyze various Decentralized Finance (DeFi) protocols in terms of their token distributions. We propose an iterative mapping process that allows us to split aggregate token holdings from custodial and escrow contracts and assign them to their economic beneficiaries. This method accounts for liquidity-, lending-, and staking-pools, as well as token wrappers, and can be used to break down token holdings, even for high nesting levels. We compute individual address balances for several snapshots and analyze intertemporal distribution changes. In addition, we study reallocation and protocol usage data, and propose a proxy for measuring token dependencies and ecosystem integration. The paper offers new insights on DeFi interoperability as well as token ownership distribution and may serve as a foundation for further research."

Wyoming's governor has signed SF 127 enacting the Wyoming Stable Token Act, creating the Wyoming stable token commission, and authorizing the issuance of stable tokens in the state. Under the Act, a Wyoming stable token is "a virtual currency representative of and redeemable for one United States dollar held in trust by the state of Wyoming" that may only be issued in exchange for a USD. The Act also outlines criteria relating to liability limitations and requires that the commission issue at least one Wyoming stable token no later than December 31, 2023.

Thailand's Securities and Exchange Commission has announced new rules that restrict crypto exchanges from providing services related to meme tokens such as Dogecoin, fan tokens or tokens issued by influencers, non-fungible tokens and exchange tokens (proprietary coins issued by crypto exchanges that can be used to trade and pay fees). After publication in the Government Gazette, the Notification has become effective from 11 June 2021 onwards without retrospective effect. https://www.sec.or.th/EN/Pages/News_Detail.aspx?SECID=8994

Cryptocurrency systems based on proof of stake (PoS) grant governance rights to the holders of currency tokens and therefore are vulnerable to attack by adversaries who buy tokens in order to gain control. To evaluate the robustness of PoS cryptocurrencies to such attacks, we model the market for tokens and determine how the cost of attacking the system depends on the level and shape of token supply and demand. We show that, contrary to popular belief, the appreciation of tokens in response to demand by attackers plays a small role in securing the system. In particular, stablecoins can be less vulnerable to attack than cryptocurrencies that are freely floating. Moreover, PoS cryptocurrencies that primarily function as mediums of exchange are vulnerable to attack if the velocity of money is high.

The U.S. Federal Reserve (Fed) published a paper that discusses the potential benefits and financial stability implications of tokenization, the process of constructing digital representations for non-crypto assets. Among the benefits of tokenization, lowering barriers to entry into otherwise inaccessible markets and improving the liquidity of such market are the most prominent. However, it concludes that tokenizations creates interconnections between the digital asset ecosystem and the traditional financial system. At sufficient scale, tokenized assets could transmit volatility from crypto asset markets to the markets for the crypto token's reference assets.

Demand for tokenized versions of U.S. Treasury bonds is soaring as rising yields in traditional financial markets attract fresh capital from crypto investors. The combined market capitalization of tokenized money market funds nears $500 million, and has quadrupled in size this year. Franklin Templeton's Franklin OnChain U.S. Government Money Fund (FOBXX) - which gives a BENJI token on the Stellar blockchain representing one share - grew to $276 million in assets at end-April. Ondo Finance's OUSG and Matrixdock's SBTB tokenized short-term Treasury security products , have grown to $132 million and $72 million of funds so far, respectively.

Sweetcoin is an "rewards"-based is a token designed to return profit users with cash back from using the Sweetbridge platform. Sweetcoin's intended uses are three-fold: to borrow against the net present value of the coin; manage the token to ensure against the asset's devaluation; stake the token as a network operation participant. Sweetbridge describes the Sweetcoin discount token as "the cornerstone of the Sweetbridge ecosystem". Sweetcoin's value comes directly from its ability to grant monthly discounts that grow as the revenue in the Sweetbridge network grows, according to the project. The "rewards" are generated for users by locking a minimum amount of the Sweetcoin token in a wallet from month to month.