Tokenization of assets in the contemporary financial system. Determinants and potential implications

Tokenization is the digital representation of an existing physical or financial asset on a distributed ledger. It refers to the process of recording traditional assets, such as financial instruments, collateral portfolios, or real-world property using Distributed Ledger Technology (DLT). Asset tokenization specifically involves linking or embedding the economic value and legal rights of tangible or intangible assets into digital tokens created on a blockchain. The concept of Tokenomics describes the ability of organizations to design business models and projects based on the creation, distribution, and trading of digital tokens. These tokens can represent both real objects and intangible assets, including cash, patents, copyrights, and other forms of intellectual property. By enabling assets to be converted into divisible digital units, tokenization facilitates fractional ownership and improves liquidity. This procedure is increasingly being applied to a wide range of asset classes, such as real estate, commodities, equity shares, intellectual property, and personal valuables. Blockchain technology plays a critical role in ensuring the security, immutability, and transferability of these tokens. The aim of this research is to examine the key factors that determine the adoption of asset tokenization in the contemporary financial system. The study analyzes the benefits and costs associated with tokenization and explores current developments and anticipated future trends in this field.