Tokenised Assets: A New Era for Retail Investors
Christopher Perkins, President of the cryptocurrency investment firm CoinFund, advocates for the transformative potential of tokenised assets in private markets. He draws parallels to exchange-traded funds (ETFs), positing that tokenisation could enable everyday investors to access previously restricted investment opportunities.
In a recent interview with Cointelegraph, Perkins stated, “I believe tokens are the new ETFs,” referencing how ETFs, introduced to US exchanges in 1993, democratized the investment landscape by granting individual investors access to sophisticated financial instruments once reserved for professionals.
Perkins emphasises the current exclusion of ordinary individuals from private markets, noting that they encompass about 81% of companies with revenues exceeding $100 million in the US, according to statistics from BlackRock. He highlights that this leaves many potential investors disconnected from innovative and high-growth companies. “This effectively limits access to some of the most exciting and transformative businesses,” he added.
The tokenisation of real-world assets, Perkins argues, could help bridge the gap between institutional and retail investors by tackling the information asymmetry that often hinders access to private placements due to stringent accreditation laws. The CoinFund President underscores the growing urgency of this transition, as the number of publicly listed companies in the US continues to decline, reaching just half of what it was in the 1990s. “Our public markets are completely broken right now,” Perkins states, calling for a reconsideration of investment frameworks that have become outdated.
Further fuelling this dialogue is SEC Commissioner Hester Peirce, who leads the regulator’s crypto taskforce. She recently cautioned participants that tokenising an asset doesn’t alter its fundamental nature or exempt it from existing securities regulations. “As powerful as blockchain technology is, it does not magically transform the nature of the underlying asset,” she advised, reiterating that tokenised securities remain under the purview of federal laws.
In response, Perkins took to social media to assert that tokenised stocks are legitimate financial instruments and do not contravene legal principles. He acknowledged that while derivatives and other related products have regulatory guidelines, they don’t invalidate the utility of tokenised assets.
Perkins also urged the SEC to reconsider regulations surrounding tokenised assets, likening it to the regulatory evolution that occurred for ETFs in the 90s. He believes that the SEC can refine its rules to foster innovation while still prioritising investor protections and leveraging the advantages of blockchain technology.
The ongoing discourse surrounding tokenisation underscores a pivotal moment in financial markets, as stakeholders seek ways to balance innovation with regulation. As more industries recognise the potential of blockchain and tokenised assets, the conversation around creating equitable access for retail investors will likely remain at the forefront.
In summary, tokenised assets may redefine investment landscapes, expand access to innovative companies, and challenge existing regulatory frameworks. As Perkins and others advocate for a progressive regulatory approach, the future of tokenisation in finance appears promising.
