Foreword
Over the past year, we have witnessed a rapid acceleration in tokenisation initiatives, reflecting a significant shift towards more accessible, efficient and inclusive financial systems.
In particular, real-world asset tokenisation of trade finance assets represents both a shift in how we perceive value and ownership, and a fundamental change in the mechanisms of investment and exchange.
Through our successful pilot within Monetary Authority of Singapore-led Project Guardian, we demonstrated the viability of asset-backed tokenisation as an innovative originate-to-distribute structure, and the potential opportunities it presents to investors to participate in financing real-world economic activity.
By transforming trade assets into transferable instruments, we unlock a level of liquidity, divisibility and accessibility previously unimaginable. Not only does it provide a new opportunity for investors to balance their portfolio with a digital token that has traceable intrinsic value, but it can also help narrow the USD 2.5 trillion global trade finance gap.
As we continue to build on our learnings and move towards operationalising this innovation at scale, this paper explores the transformative power of trade finance asset tokenisation. We delve into the remarkable opportunities this brings and share why now is the perfect time to adopt and scale tokenisation in trade finance. We also examine the key benefits of embracing tokenisation, and present actions you can take now as investors, banks, governments and regulators to capture this opportunity and join us on the journey to shape the next chapter in finance.
We are excited to share our insights and experiences in this white paper and to explore the vast opportunities that tokenisation offers.
Together, we can pave the way for a more innovative and inclusive financial ecosystem.
Kai Fehr
Global Head, Trade & Working Capital, Standard Chartered
What is Asset Tokenisation?
As the financial world experiences rapid digitalisation, digital assets stand at the forefront, revolutionising how we view and exchange assets. Combining the innovation brought by blockchain with traditional finance, they usher in a new era of digital finance that is fundamentally reshaping our sense of value and ownership.
The Evolution of Asset Tokenisation
The roots of tokenisation stretch back to as early as the 1990s. Real estate investment trusts (REITs) and exchange-traded funds (ETFs) were pioneering fractional ownership of real assets, enabling investors to own a fraction of real assets, such as buildings or commodities.
What’s Next in Tokenisation
We see the next three years as a critical junction for tokenisation with new asset classes being rapidly tokenised, and trade finance assets taking a center stage as a new asset class. Industry development is reaching a new level where public utility will be rewarded more than siloed efforts.
Tokenisation in Trade Finance: Why Now?
As tokenisation brings unprecedented levels of liquidity, divisibility, and accessibility for an asset class that has been perceived as complex over the past decade, the current macro and banking environment acts as a catalyst for adoption.
Embracing the Four Benefits of Tokenisation
Trade finance fuels the global economy, yet traditionally, such assets are sold largely to banks. Tokenisation opens doors to a broader pool of investors and unlocks a new era of growth and efficiency.