Digital transformation is reshaping the financial industry. One of the most promising innovations in this space is the tokenization of assets. A recent report by the CFA Institute shows how real-world and financial assets can be represented as digital tokens on a blockchain, making capital markets more efficient, transparent, and accessible.
What is Tokenization?
Tokenization refers to the process of turning assets such as real estate, fund shares, or equity into digital tokens on a Distributed Ledger Technology (DLT) system. These tokens can be securely transferred, tracked in real-time, and traded globally – 24/7.
Top 3 Benefits of Tokenization
- Increased Efficiency in Settlement
Smart contracts enable faster and cheaper execution of transactions – potentially even real-time clearing and settlement.
- Greater Transparency & Regulatory Compliance
DLT provides an immutable record of all transactions. Automated compliance checks improve auditability and reduce risk.
- Wider Access through Fractional Ownership
Tokenization enables small investors to participate in traditionally high-value or illiquid assets, such as private equity or fine art.
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Cow Level AG: A Swiss Pioneer in Tokenized Equity
Cow Level AG was one of the first companies in Switzerland to issue tokenized shares, establishing a fully compliant structure together with daura. The company has now successfully held five “tokenized” annual general meetings (AGMs), a milestone in the adoption of blockchain-based corporate governance.
In addition, Cow Level AG was the first issuer to participate in a pilot program for tokenized shares on the digital marketplace of Berner Kantonalbank (BEKB) – a significant step toward secondary market adoption of tokenized equities in Switzerland.
Use Cases: From Art to SME Equity
The CFA report outlines further real-world applications of tokenization, such as:
- Tokenized gold
- Digitized fund shares
- Platforms for managing repurchase agreements (repos)
- Tokenized SME shares
These examples show how diverse assets are being transformed into programmable, tradable units.
Challenges That Remain
Despite the momentum, tokenization still faces several hurdles:
- Technical risks, such as smart contract vulnerabilities or data breaches.
- Lack of standardization, especially across jurisdictions, which complicates global scalability.
Conclusion: More Than Just a Buzzword
Tokenization is quickly becoming a key enabler for modern capital markets. It reduces friction, lowers entry barriers and creates new pathways for small and medium-sized enterprises (SMEs) to raise capital and engage with investors.
With real-world implementations and a clear commitment to innovation, Cow Level AG demonstrates that the future of finance is already here.
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