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Tokenized treasuries will dethrone stablecoins as the institutional collateral of choice: Securitize
The Scoop
Tokenization Does Not Guarantee Liquidity
Tokenization can enhance fractional ownership by digitizing securities and creating a scalable online purchasing experience, but it does not inherently provide liquidity for all assets. The misconception that tokenizing any asset will make it liquid overlooks the fundamental issues of demand and asset quality. Historical trends indicate that tokenization faces similar challenges as the crowdfunding industry, particularly the adverse selection problem, where low-quality assets are mistakenly perceived as appealing through tokenization. Additionally, in a high-interest rate environment, risk-free treasury bonds become more attractive compared to illiquid, higher-yield investments. As interest rates eventually decline, alternative asset classes, such as collateralized loan obligations (CLOs) and private trade products, are expected to emerge as viable, yield-generating options that offer moderate liquidity.
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