Tokenization will bring desirable stability to emerging markets

Tokenization will bring desirable stability to emerging markets

One of the biggest challenges emerging markets face is volatility. Fueled by political and economic instability, dependence on a limited number of industries, and market accessibility constraints, these problems are exacerbated by a poor or nonexistent regulatory framework. While it doesn’t look like many of these things are changing anytime soon, there are financial and technological implementations that can be introduced to ensure stability. Tokenization – a relatively new, blockchain-based crypto-asset ratification of assets may be the vehicle that makes this vision come true.

More asset movements are essential for a mature and prosperous market. In other words, the markets need liquidity, which comes in part from participation. If the number of participants is insufficient, the chances are low that a security is liquid. As a result, the market remains more stagnant, investors see a higher risk and economies then become dependent on a few strong industries to compensate, while foreign and domestic players are unable to generate wealth from within through other means of the market. Ultimately, greater participation would lead to higher liquidity, but politico-economic systems can hamper progress.

Derek boirun is the founder, CEO and director of Realio. Derek is an entrepreneur with institutional experience in commercial real estate development, EB-5 capital investments, and blockchain-based investing. He previously founded and currently serves as a Managing Member of the American Economic Growth Fund, an EB-5 investment platform focused on raising capital overseas for US-based real estate projects. To date, the fund has two regional centers, hosts more than 100 investors and sponsors over $ 1.2 billion in total project cost.