Update Aug. 21, 2:23 p.m. UTC: This article has been revised to incorporate a section on stablecoin adoption in Latin America.
According to Bitfinex Securities, the adoption of tokenization could address several systemic inefficiencies in Latin American capital markets and enhance investment flows within the region.
Systemic inefficiencies—such as elevated fees, intricate regulations, and structural challenges like technological hurdles and high startup costs—are impeding investment and capital movement into Latin American markets, a situation referred to as “liquidity latency,” as noted in the Bitfinex Securities Market Inclusion report, published on Thursday.
The adoption of real-world asset (RWA) tokenization could potentially mitigate the liquidity latency issue in the region. This process involves the minting of financial and tangible assets on a blockchain, thus broadening investor access and trading possibilities for such assets.
Tokenized financial products on the blockchain enhance accessibility, transparency, and efficiency, allowing for a reduction in capital raise issuance costs by up to 4% and shortening listing times by as much as 90 days, according to Bitfinex. The firm stated that tokenization has the potential to broaden investor access and generate more trading opportunities.
“Tokenisation represents the first genuine opportunity in generations to rethink finance,” remarked Jesse Knutson, head of operations at Bitfinex Securities, in the report. “It lowers costs, accelerates access, and creates a more direct connection between issuers and investors.”
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Tokenization removes capital access barriers for developing economies: Paolo Ardoino
Paolo Ardoino, CEO of Tether and chief technology officer of Bitfinex Securities, believes that adopting tokenized financial products may create new opportunities for capital access in developing economies.
“For decades, businesses and individuals, especially in emerging markets, have encountered significant barriers to accessing capital through traditional financial institutions,” Ardoino stated.
“Tokenisation actively removes these barriers.”
He further emphasized that tokenized products can unlock capital in a more efficient and economical manner, offering investors access to higher-yield products that are compliant with regulations.
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Bitfinex was the pioneer exchange to obtain a digital asset service provider license under El Salvador’s new Digital Assets Issuance Law, permitting the platform to issue and facilitate secondary trading of tokenized assets.
The platform’s initial offerings included tokenized US Treasury bills, aimed at enabling “literally anyone to hedge their savings against the world’s reserve currency.”
Several of the largest consulting firms view tokenization as a multi-trillion-dollar opportunity.
Tokenized securities alone could reach a potential market size of $3 trillion by 2030 in a bullish scenario and $1.8 trillion in a baseline scenario, according to estimates from McKinsey, referenced in the Bitfinex report.
More individuals in Latin America are increasingly turning to cryptocurrencies and stablecoins as a means of financial security.
According to the third edition of the Latin America Crypto Landscape report published by Bitso, stablecoins like USDC (USDC) and USDt (USDT) have become a “store of value” in the region, representing 39% of all purchases made on the platform in 2024. issued on March 12.
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