Tokens: Even complex and bureaucratic areas are transformed with the innovation and efficiency of the model

If you haven't heard the expression tokenization, it's best not to waste any more time. Sooner or later, this new business model will be part of your life – whether you are prepared for it or not. The transformation of physical assets into digital ones is the major technological trend that is approaching in the most different sectors, to the point of transforming entire areas and creating their own economic dynamics.

This expression has gained strength in recent years as it names a direct consequence of the digital transformation we are currently experiencing. Now, if most of the processes that govern different aspects of our lives are migrating to the virtual environment, it was obvious that financial assets would follow the same path. The question was how to do this in a safe, transparent and, of course, efficient way without putting the goods and assets of people and companies at risk.

The answer lies in the popularization of technology blockchain, which was boosted by cryptocurrencies in the last decade. After the initial resistance passed, it became clear to everyone that there was no better resource to Scanning real assets. In addition to protecting information by dividing it into small encrypted blocks, making it almost impossible to change, it offers the possibility of smartcontract (smart contract), which serves as a document to determine the operating rules of that asset.

Therefore, in a scenario that discusses the possibility of the metaverse and digital acceleration in practically our entire lives, it is the tokens that will guarantee the success of financial operations in this new reality. Today, this concept may sound strange or even arouse concern in many professionals. But make no mistake: in the near future it will be as popular as the internet itself.

Tokenization is still in its infancy

Despite all the excitement and the different projects that already exist around the world, the tokenization process is just beginning. In other words, there is still a lot of room for growth and consolidation through the success (and even failure) of some cases. Several sectors are beginning to explore the possibilities that this concept has to offer in their business models.

To give you an idea, a survey by consultancy MarketsandMarkets estimates that the global tokenization market should grow by 19% per year until 2026. The sector will go from US$ 2.3 billion in 2021 to US$ 5.6 billion in five years. The growth is driven precisely by the wide adoption space among consumers, which causes different companies to start investing heavily in the subject.

Furthermore, it is necessary to highlight two more topics. First, there is the low number of companies and, mainly, of professionals dedicated to facilitating this procedure – like any new thing, it is necessary to deepen new knowledge. This is reflected in the second issue, which is the need to update the regulatory frameworks that govern topics such as technology and finance.

Therefore, the perfect combination is found for the consolidation of tokenization in the most different markets: there is a growing demand among users, space for the construction of innovative projects, intense public debate about its possibilities and the advancement of labor in conjunction with the technology itself. It is a matter of time to advance further on the global stage.

And how far can tokens go?

Evidently, every phase of exponential growth of a technology is followed by a stage of consolidation and maturation. But what would it be like in relation to tokenization? Simple: complete use in all sectors. Due to its countless possibilities, as it can serve as an access key, exchange currency and engagement platform, the tendency is to gain space in the most varied markets.

Retail, due to its characteristics of innovation and proximity to consumers, came out ahead in this race, according to the aforementioned survey by MarketsandMarkets. It is not difficult to find large retail chains that use tokens to promote relationship programs and offer discounts and promotions as a way of attracting and retaining customers.

However, other, much more complex sectors are also exploring the opportunities of tokenization. The real estate market, for example, is beginning to develop its first projects with the mission of reducing bureaucracy and democratizing access to projects. The mining industry, in turn, uses tokens to facilitate precious metals trading. Automotive companies anticipate receivables using this technology.

As can be seen, even the much more complex and bureaucratic areas perceive tokenization as an efficient way of doing business and finding new opportunities. This new model will grow a lot precisely because it facilitates processes and expands possibilities. So don't be surprised by what will happen in the future. The token revolution is just beginning!

Per Cassius Krupinsk is CEO of BlockBR, fintech in digital assets marketplace and investments.