By
Anisha Pandey
May 30th, 2024
As per the KPMG Canada’s representative, blockchain-based tokenized shares will become the crypto industry’s biggest institutional use case and institutional DeFi players would prefer to transact in a more permissioned environment.
Kunal Bhasin, a digital asset co-lead at KPMG Canada, stated that tokenization would change the way big players own commercial buildings and would make it accessible to a wider audience, previously confined only to those with deep pockets and pension fund managers.
With blockchain-tokenized shares gaining popularity, institutional investors and family offices would be able to own parts of Toronto’s sprawling skyline. “Tokenization of commercial real estate can actually enable that,” Bhasin said. Bhasin predicts that blockchain-based tokenized shares will become the crypto industry’s biggest institutional use case. However, Bhasin added that institutional DeFi players would prefer to transact in a more permissioned environment. Speaking to CoinTelegraph, he said:
“Institutions recognize the efficiency that a decentralized financial technology brings, but they want to know the participants that they are interacting with.”
Know-your-client checks will also play a crucial role in the process, according to Bhasin. Tokenized real estate is gradually gaining traction. Bitfinex Securities facilitated a tokenized asset raise for a 4,500-square-foot Hampton by Hilton hotel at El Salvador’s international airport in April. However, it has only managed to raise $342,000 so far, falling short of its $6.25 million goal.
What’s Holding Institutions Back?
Some of the top asset managers and banks still have concerns about becoming more active in the crypto space due to several scams and frauds happening in the market. Thus, the “reputational risk” still remains around the corner, said Bhasin.
Bhasin stated that KPMG utilizes infrastructure from blockchain analytics firm Chainalysis to detect potential illicit activities associated with its client base.
The KMPG executive added that although there’s fraud in every industry, banks prefer to work with industry players that implement the necessary infrastructure and systems that identify any illicit activities. He added:
“Soon, not being involved in crypto and digital assets is going to be a career risk. If you are not offering it today, your competitors are – and they are getting that advantage over you.”
The tokenization of real-world assets is gaining traction as the Web-3 industry expands quickly. Thus, within the next decade, we’re likely to more real-world assets on-chain.