The Beled Master is saying that Tokenism is reshaping the global financial order

By Larry Fink (BlackRock CEO) & Rob Goldstein (BlackRock COO)

Original title: Larry Fink and Rob Goldstein on how tokenism could translate

Fifty years ago, funds went around in a circle and had to be mailed。

twenty years ago, cross-border transactions waited for &ldquao; days &rdquao。

And today, the millisecond trade is no longer worth showing off。

the real change is not the speed, but the reshaping of & ldquo; the way assets exist & rdquo。

The CEO Larry Fink and COORob Goldstein gave this era a sobering judgement: the future of stocks, bonds, real estate, funds, and even currencies will become & ldquo; a line of code on the chain & rdquo。

it's not an encrypted story, it's a financial & ldqua; it's a reconstruction time & rdqua。

Fifty years ago, funds moved as slowly as mail. When one of us started his career in 1976, the deal was made by telephone and settled with a hand-delivered paper voucher. In 1977, a technology called SWIFT achieved standardized electronic interbank messaging, reducing transaction time from a few days to a few minutes. Today, the transaction between New York and London is executed in milliseconds。

The financial sector is now undergoing the next major evolution of the market access infrastructure — this evolution can move assets faster and safer than the system that has served investors for decades. It began in 2009 when a developer named Satoshi Nakamoto introduced Bitcoin as a shared digital book to record transactions without intermediaries. A few years later, the same technology, — — — gave rise to more transformative things: Tokenism。

the monetization involves recording ownership in a digital ledger. it enables almost all assets, from real estate to corporate debt or currency, to be present in individual digital records and independently validated by participants. at first, the financial community — — including us — — it's hard to see this grand idea. the monetization is entwined with the trend of encryption, which usually looks like speculation. in recent years, however, the traditional financial sector has seen something hidden: monetization can significantly expand the world of investable assets beyond the currently marketed stocks and bonds。

THERE ARE TWO MAJOR BENEFITS TO BE DERIVED FROM THE MONETIZATION OF ASSETS. FIRST, IT OFFERS THE POTENTIAL FOR IMMEDIATE SETTLEMENT OF TRANSACTIONS. TODAY ' S MARKET OPERATES ON DIFFERENT SETTLEMENT LINES, EXPOSING BUYERS AND SELLERS TO THE RISK THAT ONE OF THEM MAY NOT BE ABLE TO MEET ITS OBLIGATIONS. STANDARDIZATION OF INSTANT SETTLEMENTS IN GLOBAL MARKETS WOULD BE ANOTHER LEAP BEYOND WHAT SWIFT HAD ACHIEVED。

second, private market assets continue to rely heavily on paper — — manual processes, customised settlements and failure to keep up with the development of other parts of the financial industry. coding can replace paper with codes to reduce frictions that make asset transactions costly and slow. it can expand long-term market participation led by large institutions by transforming large non-market holdings such as real estate or infrastructure into smaller, more accessible units。

technology alone cannot remove all barriers. regulation and investor protection remain crucial. by reducing costs and complexity, however, monetization can provide more diversification for more investors. early signs of progress have emerged. representative “ real world ” tokens of traditional financial assets (stocks, bonds, etc.) still represent a small share of global equity and fixed-income markets but are growing rapidly — — increasing by about 300 per cent over the past 20 months。

many early adoptions occur in the developing world, where banking services are limited. nearly three quarters of the owners of encrypted currency live outside the west. at the same time, modern financial economies — — u.s., uk and eu — — are lagging behind, at least in terms of where the transaction took place. it is true that many of the companies most likely to lead the transformation of the monetization financial system, including those in the area of currency stabilization, are united states companies. but this early advantage is not natural。

if history can be used, today’s monetization is roughly equivalent to the 1996 internet — — when amazon sold only $16 million of books, today & ldquo; & rdquo; three of the technology giants have not even been established. monetization may develop at the speed of the internet — — faster than most people expect, with significant growth in the coming decades。

It will not soon replace the existing financial system. Rather, it can be seen as a bridge that is being built simultaneously from both sides of the river and that meets in the middle. On one side are traditional institutions. The other side is digitally preferred innovators: stable money issuers, financial technology companies and public block chains。

The two are not so much competing as learning how to interoperability. In the future, stocks and bonds would not be placed in one portfolio and encrypted currencies in another. Assets can one day be purchased, sold and held through a single digital wallet。

Policymakers and regulators have a clear mandate: to help build this bridge quickly and safely. The best way is not to create an entirely new set of rules for the digital market, but to update our existing rules so that traditional and monetized markets can work together。

We have seen the power of this connection. The first ETFs linked stock markets in more than 20 countries to a single fund, making global investment easier. The same is true for fixed earnings, linking the traders ' markets to public exchanges and enabling investors to deal more effectively. There are spot bitcoin ETFs, even digital assets on traditional exchanges. Every innovation is building bridges。

The same principle applies to monetization. Regulators should strive for consistency: risks should be judged by their nature, not by their packaging. Even if bonds exist on block chains, they remain bonds。

innovation, however, requires “ fence ”: clear buyer protection measures to ensure that monetized products are safe and transparent; strong counterparty risk standards to prevent shocks from spilling over to the platform; and digital identification systems so that those who want to trade and invest can have the same confidence in brushing cards or wire transfers。

Andrew & Middot; Ross & Middot; Andrew Ross Sorkin, in his new book on the stock market crash of 1929, relives those failures that led to the birth of the modern financial system. Some are technical: at “ Black Tuesday & rdquo; stock-line machines are several hours behind to keep up with the surge in transactions. Others are institutional: a financial system that is growing faster than security。

Monetization can modernize the still slow and expensive infrastructure of some parts of the financial system, bringing more people into the world ' s most powerful engine of wealth creation: the market. But, as we were taught in 1929, every move to expand participation must be accompanied by renewed security guarantees. The monetization must be two things: faster and safer, while building confidence。