BlackRock's CEO, Larry Fink believes that the tokenization of real world assets (RWAs) will make investing as seamless as mobile payments.
"Half the world’s population carries a digital wallet on their phone. Imagine if that same digital wallet could also let you invest in a broad mix of companies for the long term—as easily as sending a payment," Fink wrote in his annual letter. "Tokenization could help accelerate that future by updating the plumbing of the financial system—making investments easier to issue, easier to trade, and easier to access." — The Block
The barrier is dropping
Before we talk about tokenization, it's worth looking towards the general effects of advancements in technology over the years.
Perfected in Europe, reportedly around 1450 by German inventor Johannes Gutenberg, the printing press made way for mass literacy by enabling mass production of books and documents.
The "access barrier to knowledge" lowered.
Then came the Internet, and it's since been almost too easy to gain access to information with only a few key or button presses.
Search engines like Google have amplified this ease and generative AI today, is bringing "context" to information discovery and access. Not only do you find what you're searching for, you find it with meaning to a great extent previously requiring hours of deep research.
In finance specifically, ATMs made accessing funds held at the banks hassle-free. Digital payments, which is honorably being referenced today, made it so payments can be made on the go. One could misplace or forget a card or simply not be close to an ATM, but a mobile phone will always be in pockets, at least most of the time.
Technology has generally lowered not just cost of doing things, but access or ability to do them more easily or at a convenience.
Tokenization: solving access to financial products
Tokenized real world assets (RWAs) using blockchain as a distribution layer where investors can manage assets independently, through their wallets, are currently valued at $26.53 billion, according to data from rwa.xyz
This means that access barriers for $26.53 billion in traditional assets have just been lowered.
While the extent of access today is still limited, it is expected that has more and more assets and capital get moved on-chain, access to financial products will become, as Larry Fink described: seamless as mobile payments.
I think that it is worth noting that when it comes to tokenization, it is not just about some "open door" access to financial products that will revolutionize investing, it is the inherent fractional design of these digital assets.
When traditional assets can be traded in smaller fractions, a new found of access is enabled.
Not only is the average person having entry access, they also have "lowered cost access" where they are not priced out of opportunities.