The Monetary Authority of Singapore’s (MAS) Project Guardian has been making waves in recent months for its progressive approach to digital assets.
For instance, MAS recently launched the world’s first live repurchase transaction using a digitally native bond on a public blockchain. This and countless other innovations mark a significant milestone in its recent digital asset approach.
However, while optimistic about MAS’s developments, Ralf Kubli, a board member of the Casper Association, the organization responsible for overseeing Casper Network, highlights that this innovation isn’t without its challenges.
Kubli believes a critical yet often overlooked aspect of the tokenization process is the issue of standardization.
In an interview with CryptoSlate, he explained that current practices in asset tokenization primarily focus on digitizing the asset itself but neglect to incorporate the associated liabilities and cash flows into this digital transformation. This results in the creation of asset-backed tokens appended to blockchains, typically accompanied by a simple PDF outlining terms and conditions.
Kubli believes this approach, while seemingly efficient, still necessitates manual intervention for cash flow calculations, potentially leading to errors and discrepancies. He points out that this lack of transparency and verifiability in cash flows closely resembles the issues that precipitated the 2008 banking crisis. Further, Kubli argues that the key to averting a similar economic catastrophe is ensuring that cash flows are digitized, tokenized in a machine-executable format, and, crucially, standardized.
In the forthcoming interview, Ralf Kubli delves deeper into these challenges and explores the potential pathways to a more secure and efficient future in asset tokenization.
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