Unlocking the Potential of Tokenisation and Stablecoins: The Next Big Thing in Asset Management

by
Juha Viitala
Tokens illustration

In January, Fidelity, one of the world's largest asset managers, held its annual Fintech Showcase event. Membrane Finance was selected as one of the four companies in Europe to showcase our story and solution. The event's key takeaway was the potential disruption that stablecoins and tokenised assets could bring to the industry.

In recent months, several firms have announced tokenisation initiatives, including BNY Mellon, BlackRock and Goldman Sachs, all of whom are exploring the technology seriously and believe it will be the future of digital assets. Even Mastercard CEO Michael Miebach has predicted that "everything will be tokenised and passed around in a safe fashion."

J.P. Morgan has already completed a landmark transaction using tokenised ownership interests in Money Market Fund (MMF) shares as collateral. Goldman Sachs focuses on tokenisation, remaking the plumbing of financial markets, and the profound effect digital money will have across markets. Meanwhile, ABN Amro has become the first bank in the Netherlands to register a digital bond on the public blockchain.

In light of the forthcoming MiCA regulation, a new initiative called Tokenise Europe 2025 is being spearheaded by the European Commission and the German Banking Association to tap into the potential of asset tokenisation and distributed ledger technology to strengthen the EU's competitiveness and build long-term economic resilience.

Tokenisation allows fractional ownership, making it easier for investors to access various asset classes. However, until now, the need for a suitable, trusted, internet-native payment method has been a challenge.

Why stablecoins are the missing link in the evolution of asset management

Stablecoins have emerged as the main settlement currency on decentralised markets, providing a secure and stable medium of exchange, reducing volatility, and enabling safe, on-chain-native transactions. "Total value settled with stablecoins is rising in the bear market, reaching over $7 trillion in 2022. For comparison, Mastercard processed” $2.2 trillion in value in 2022”, Patrick Hansen, Director of EU Strategy & Policy on Circle, tweeted on 5 February

By combining asset tokenisation with stablecoins, investors can take advantage of new and innovative investment products, such as tokenised real estate and tokenised debt instruments, with a secure and stable medium of exchange. "Since we have launched our EU-regulated EUR-stablecoin EUROe, we have witnessed immense interest towards regulated, on-chain-native, tokenised currency enabling fast and efficient transaction for digitalised assets," says Juha Viitala, CEO of Membrane Finance.

The introduction of the Markets in Crypto-Assets Regulation (MiCA) in the EU in circa 2024 will set forth new requirements for capital controls and further consolidate the standing of compliant stablecoins in the EU. While US financial regulators have placed some of the largest dollar stablecoins under scrutiny, opportunities presented by stablecoins must be acknowledged to progress regulatory environments and create a more secure money infrastructure.

Membrane Finance thanks Fidelity for recognising its potential and allowing us to present its work on a global stage with its EU-regulated, first-of-a-kind stablecoin, EUROe.

References

https://www.jpmorgan.com/solutions/treasury-payments/insights/blockchain-onyx-asset-tokenization

https://www.cnbc.com/2023/02/10/goldman-sachs-digital-asset-chief-lays-out-blockchain-strategy.html

https://fintechnews.ch/blockchain_bitcoin/abn-amro-issues-digital-bond-on-stellar-blockchain/57689/

https://fintechnews.ch/blockchain_bitcoin/abn-amro-issues-digital-bond-on-stellar-blockchain/57689/

https://fintechnews.ch/blockchain_bitcoin/eu-tokenise-europe-2025-initiative-aims-to-boosts-asset-tokenization/58183/

https://twitter.com/paddi_hansen/status/1622191297686827009

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