eNor Securities’ Post

The importance of reading more than the headline...... As resource management becomes more vital to financial institutions, how do they utilise the vast amounts of data available to make intelligent decisions and maintain business levels? #operations #operationalexcellence #DoMoreWithLess #blackrock

Future of Finance - is Tokenised, is Data driven, is Green Capital Markets is next in line to adopt tokenisation. Tokenised Stocks and Bonds. An unique identity to an unit and being recorded on a single ledger. > Costs of settlements go down with Instaneous Settlements - move over T+0,+1,+2 > Monitor and Track all fraudulent activities > Corporate actions like Voting etc, are completely structured Listen to Larry Fink and you feel it’s round the corner. #tokensation, #capitalmarkets,#futureoffinance

What will be the impact of US tokenization on the EU and UK financial markets?

Equity offerings / dilutions through Tokenization will bring the financial markets on the brink of another transformation and a new Share Class, as the market and regulators drive towards T+O and eventually sametime settlement, thus helping ETF’s and Mutual funds reduce costs further and have a good hold on the counterparty risk and liquidity of the underlying assets. In the coming decade we will see Primary and Secondary Market Regulatory Ecosystem’s getting upgraded to support Tokenized transactions and Holdings with the maturing of Blockchain, Digital + Crypto Currencies and Web 3.0 ( Not to forget Metaverse Market expansion opportunity )

Here is a video where BlackRock's CEO explains how tokenization is shaping the future of finance: "𝑬𝒗𝒆𝒓𝒚 𝒔𝒕𝒐𝒄𝒌, 𝒆𝒗𝒆𝒓𝒚 𝒃𝒐𝒏𝒅 𝒘𝒊𝒍𝒍 𝒃𝒆 𝒕𝒐𝒌𝒆𝒏𝒊𝒛𝒆𝒅 𝒐𝒏 𝒂 𝒍𝒆𝒅𝒈𝒆𝒓!" We repeat again and again that this technology is just too comfortable to avoid using it! #Tokenization $RKFI

Powerful thoughts from the CEO of BlackRock on tokenization. The future is all assets tokenized and traded on a single platform with a unique ID for each investor. Result? Lower transaction costs, greater personalization, and lower illicit trade. In my view, this will require a harmonized framework around tokenization to improve interoperability and unify emerging siloed tokenization-islands across markets. Elias Ghanem Chirag Thakral Vivek Singh

And what would be the savings in transaction cost to customers of a bank if they used tokens on the blockchain? Here is an example... Bank of America, like other major banks, incurs various costs associated with transaction processing, including fees for wire transfers. The cost for wire transfers can vary significantly, with Bank of America charging between $0 and $15 for incoming domestic wires, $30 for outgoing domestic wires, $16 for incoming international wires, and $45 for outgoing international wires. Therefore, if Bank of America's customers transitioned to using tokens instead of traditional transaction methods, the savings could be substantial. These savings would likely come from reduced transaction fees, lower operational costs due to increased automation, and faster, more efficient payment processing enabled by blockchain technology. Let's assume the following based on the notional information: Average Wire Transfer Cost: Combining incoming and outgoing, domestic and international transactions, we have an average cost per wire transfer at Bank of America. For simplicity, let's use the figures provided for outgoing transactions as they are typically higher: $30 for domestic and $45 for international transfers. Number of Transactions: The exact number of wire transactions processed by Bank of America is not publicly available. However, for the sake of estimation, let's assume that each of BoA's approximately 67 million consumer and small business clients conducts one wire transfer per year. This is likely an underestimation, as businesses and some consumers will conduct multiple transactions monthly or even weekly. Savings from Tokenization: If tokenization reduces the transaction costs by a significant percentage, say 50% to 90% due to the elimination of intermediary fees and operational efficiencies, we can estimate the savings. Given these assumptions, here's how we could estimate the annual savings: Calculate the average cost savings per transaction with tokenization. Multiply this average saving by the estimated number of transactions per year. The average cost of wire transfers (combining domestic and international) at Bank of America is estimated to be $37.50 per transaction. If tokenization reduces transaction costs by 50%, the savings per transaction would be $18.75. If the reduction is 90%, the savings per transaction would increase to $33.75. Considering all of Bank of America's approximately 67 million consumer and small business clients conducting one wire transfer per year: The total annual savings could be around $1.26 billion if the cost reduction is 50%. If the cost reduction is 90%, the total annual savings could reach approximately $2.26 billion. These figures provide a rough estimation of the potential savings. Actual savings could vary based on the actual number of transactions, the exact costs involved, and the degree to which tokenization reduces these costs. Do you believe Tokenization is coming?

BlackRock's CEO, Larry Fink on tokenization...probably nothing 💬 "We believe the next step going forward will be the tokenization of financial assets" 💬 "And that means, every stock, every bond, will basically have its own CUSIP (a nine-character numeric or alphanumeric code that uniquely identifies a North American financial security for the purposes of facilitating clearing and settlement of trades)" 💬 "It will be on one general ledger. Every investor, you and I, will have our own number, our own identification" 💬 "We could rid ourselves of illicit activities around bonds and stocks through tokenization" 💬 "But the most important thing, we could customise strategies through tokenization that fits every individual" 💬 "We would have instantaneous settlement. Think about all the costs of settling bonds and stocks, but through tokenization, everything can be immediate because it's just a line item". 💬 "We believe this is a technological transformation for financial assets" #tokenization

Protecting your money shouldn't come at the cost of giving up your privacy. BlackRock's CEO, Larry Fink wants to tokenise all your traded assets and assign your identity to them. "It will be on one general ledger. Every investor, you and I, will have our own number, our own identification" he says. Everyone will know exactly how much money you have, which is a big problem. A system like that without privacy is just a way for your government to have more control over where you will put your money. Which would lead to even higher taxations and less owned assets by the average individual. With everyone's financial picture on display, businesses and even insurance companies could exploit this information. Imagine car insurance skyrocketing because they see you have some savings, or stores charging you more for the same product based on a perceived higher wealth. This lack of privacy could also lead to increased government and corporate surveillance, raising concerns about control over your financial decisions. Personally, this would lead to endless negative consequences. Unwanted attention from ill-intentioned parties. Strained relationships due to envy and resentment from friends and family. Most importantly you will always be on guard, leading to paying for more services to protect your assets, which depletes you of them in the longterm. Overall, this strategy sounds like a way to cut into the middle again, by slowly chipping away at their assets, while the top gets more control. Plus, you should never sell your privacy to own an asset. What do you think?

A great summary from BlackRock’s Larry Fink on the benefits of blockchain and tokenization of financial assets. Couldn’t have summarised this better myself!