Digitalization is an integral part of the world as we know it. Digital processes like securities trading have shaped the financial landscape. Still, the core of the capital markets is untouched by digitalization. Securities still are documented in a certificate and physically stored in a central location.
At Cashlink, we aim to shape the capital markets of tomorrow. By the tokenization of a DAX share together with Bankhaus Scheich and Finoa, we took a monumental leap in the direction to digital securities. Praised as a 'meeting of the old world with the new world', we were able to prove that tokenization will be a key element of future capital markets.
As a pioneer in tokenization, we know the benefits of this process: Faster transactions, high transparency, and significant opportunities for cost savings. Especially the latter point has received great attention over the last year. The search for new investment opportunities, together with the need for cost savings throughout the whole value chain, are shaping the financial world in the light of the ongoing pandemic.
We decided to cooperate with the custody provider Finoa to shed light on the cost efficiencies of tokenization. An extensive report compares the process and associated costs of traditional securitization with tokenization via DLT.
To make predictions for various business scenarios, we considered different asset classes (e.g. equity, real estate, bond), issuance volume, and market scenarios (e.g. B2B, B2C). Analyzing issuances in Germany and the DACH region, the results can, to a certain degree, be applied to a global context. Data from already executed tokenizations and securitization were analyzed and compared. To enrich this data, qualitative interviews with customers and service providers from both the blockchain ecosystem and the traditional financial world were also considered.
Cost efficiencies were analyzed by tracking the value chain and respective processes of an issuance: