The process of creating digitized or tokenized assets out of a tangible or intangible asset. Tokenization capitalizes on the capability to use and leverage blockchain technology to securitize assets, both traded and non-traded.

A tokenized asset represents a divided share in the ownership of real, financial, or digital assets that is recorded on a blockchain in the form of digital tokens. By means of an asset tokenization, an issuer creates digital tokens on a distributed ledger or blockchain, which represent.

The ownership share is, per se, digital and tradable. Like an initial coin offering (ICO), the tokens are issued via a security token offering (STO) process, through which investors can buy different types of tokens (payment, equity or utility tokens.) Blockchain guarantees that the tokens issued and released represent an asset, that is immutable.

Tokenization comes with a set of benefits including lower costs, increased liquidity, faster settlement and bolstered risk management.