Renowned financial institutions, including JPMorgan, Citi, U.S. Bank, and Wells Fargo, are among the organizations that will test an upcoming regulated settlement network involving the common settlement of tokenized assets on shared-ledger technology. According to reports, payment giants Visa and Mastercard and global financial messaging service Swift will also participate in the testing process.
The innovation comes amid growing concerns over the struggles of the U.S. dollar, the universal settlement currency. In a recent report, the billionaire Tesla CEO, Elon Musk, warned that the greenback could collapse. Hence, efforts by the identified Wall Street giants to explore asset tokenization, an idea that Citi analysts predict could become a $5 trillion market by 2030.
Colin Butler, global head of institutional capital at Polygon, considers the developing trend a signal for mass crypto adoption. Butler described it as the five-yard-line for mass institutional adoption. He noted that adding the latest test is “incrementally more important” than earlier trials like JPMorgan’s onyx private blockchain and unified ledger, a concept introduced by the Bank of International Settlements (BIS) last year.
Rendering his opinion on the ongoing development, Raj Dhamodharan, executive vice president for blockchain and crypto at Mastercard, highlighted the importance of significant partnerships in blockchain exploration. According to him, it will be critical for public and private organizations to partner closely to explore how to apply blockchain solutions to solve real-world pain points and improve efficiencies.
Dhamodharan’s comment supports the statement by Larry Fink, BlackRock’s chief executive, who described asset tokenization as “the next generation for markets.” Fink’s statement aligns with his company’s recent announcement that it has entered the second stage in its plan for a crypto-based revolution in financial markets. BlackRock noted the revolution would involve launching a tokenized private equity fund.
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