Age Of Asset Tokenization: Decentralization Vs. Regulation

Navdeep Garg
Age of asset tokenization


When one says “tokenization”, many people tend to think about cryptocurrency and token sales, which made headlines in 2017. But this is only the hype version of the story. 

Some time ago, there was only one question faced by Crypto investors: whether to invest or not to invest in Bitcoin. And now, that question has become more complex. On the hype of thousands of ICOs, investors stormed blindly into Cryptocurrency. When the cryptocurrency and ICO bubble burst, it was a time of reflection for investors and issuers alike. However, there were many positive developments to come out of this initial round of crypto investment. For one, the interest in the crypto space shifted from the fringe of techno-geeks and libertarians to the mainstream. For another, ICOs paved the way for STOs – a trend that has gained popularity in many countries. 

Every decade, the IT marketplace experiences a major innovation that changes the entire data management infrastructure. In recent years, cryptocurrencies have appeared as an example of how a financial system can be made robust in a completely hostile environment—fully anonymous, permission less, distributed, and without any security administrators, firewalls or physical security. Many ideas can be borrowed from that scenario and applied to the much more friendly environment of enterprise asset management. 

Today, financial assets are too much like a loose pill on the counter. You don’t know enough about where it’s been, what’s in it, or what it will do to you. But the process we call tokenization is going to make many assets a lot more attractive to a lot more investors, in part by providing an unprecedented level of information.

Tokenization is the process of the digital transformation of asset accounting and management systems. It has nothing to do with the creation of virtual currencies. Tokenized assets are always issued to perform registration of users, processing of transactions and custodial services. These activities are performed according to local regulations.

Tokenization has plenty of promising possibilities:

  • The primary benefits of tokenization are that operations with tokens are cheaper and more secure than with traditional database records. 
  • Reliable real-time audit of an accounting system from the owner or customer perspective increases business confidence and strengthens relationships. 
  • Increased user convenience by using uniform software allows bringing onboard more customers. 
  • The liquidity of assets is increased as a result of reduced trading frictions. 

However, many important questions have yet to be answered. Regulators are still figuring out whether a utility token is a security. 

Tokenization Trends And Regulation

Tokenization is simply a traditional contract linking token rights to an asset. A trusted third party plays a vital role to ensure asset security through the token link. The issuer has fiduciary duty to protect the asset, distribute dividends, and return capital upon liquidation. 

The complicated part is regulation. For an STO to comply with US security law, the process is rather straightforward. The issuer must either file a public offering registration or rely on exemptions to sell securities. The complicated part is secondary trading that limits shareholder ability to transfer or trade-restricted tokens between accredited investors. 

Decentralization VS. Regulation

China and the US boast the strongest regulations when it comes to governing the crypto world. China completely banned ICOs and crypto exchanges. The US is still waiting for the SEC to approve a Bitcoin ETF for investors that do not own a crypto wallet. For these and other reasons, we are entering an age where business models and technology lead to regulation. 

Decentralizing Exchanges

Because of the existing security issues with crypto exchanges, the blockchain industry decided to experiment with decentralized exchanges, in which no company or website holds the customers’ cryptocurrency. Instead, investors can trade directly from their wallets and exchange their cryptocurrencies into other currencies or other wallets quickly and safely. 


At the end of the day, decentralized or not, regulated or not, one point remains clear in the new world of tokenization: the basic rules to evaluate and select an investment do not change. Prudence, due diligence, risk evaluation and research analysis still rule the day. 


Frequently Asked Questions

Our testing processes place a high priority on data security. To ensure the security of sensitive information, we adhere to a number of protocols, including the anonymization, encryption, and control of access to data. During testing, we use secure environments and data that mimic real-world scenarios without exposing sensitive information. We adhere to best practices for data protection and comply with industry standards and regulations including GDPR and HIPAA. As part of our security testing process, we employ a variety of tools and methodologies to identify and rectify security vulnerabilities.

To ensure the quality and reliability of your software solutions, we employ a comprehensive range of testing methodologies and cutting-edge tools. Our testing approach includes:

  • Manual Testing: We use structured test cases to identify usability, functionality, and design issues.
  • Automated Testing: Automated testing streamlines processes, improves efficiency, and ensures consistency.
  • Unit Testing: JUnit, NUnit, and PyUnit are unit testing frameworks we use to validate the functionality of code units.
  • Integration Testing: We verify the seamless interaction of various system components using tools such as Selenium, Appium, and Postman.
  • Performance Testing: To assess system responsiveness and scalability, we employ tools like JMeter, LoadRunner, and Gatling.
  • Security Testing: Our security testing includes vulnerability assessments and penetration testing using tools like OWASP ZAP and Nessus.
  • User Acceptance Testing (UAT): We collaborate closely with your team to ensure that the software aligns with your end-users’ expectations.

You can count on us to improve the visibility of your website on search engines by using our SEO services. On-page and technical SEO best practices are implemented by our team, content is optimized, and search engine optimization strategies are provided to improve the search engine rankings of your website.

We adhere rigorously to project timelines and deadlines at our software development company. To ensure on-time delivery, we use meticulous project management, agile methodologies, and clear communication. Depending on the scope, complexity, and your specific requirements, we conduct a comprehensive analysis and planning phase. Our project managers then track progress continuously using agile frameworks. We maintain regular status updates and transparent communication channels. Whenever changes need to be made, we let you know promptly while keeping you updated.

We specialize in a wide range of technologies and programming languages, including but not limited to Blockchain, .Net, JavaScript, C#, Ruby, PHP, Wordpress. Our expertise covers web development frameworks like React, Angular, and Vue.js, as well as mobile app development for React Native, Flutter, iOS and Android. We also have experience with cloud platforms such as AWS, Azure, and Google Cloud, and are proficient in database systems like MySQL, PostgreSQL, MongoDB, and more. Additionally, we are well-versed in DevOps tools and practices to ensure seamless deployment and ongoing maintenance of the software we develop.

Our company offers a wide range of development services, including:

  • Web Development: We specialize in creating custom websites, web applications, e-commerce platforms, and content management systems.
  • Mobile App Development: We develop mobile apps for iOS and Android platforms, from concept to deployment.
  • Software Development: Our software development services cover desktop applications, business software, and cloud-based solutions.
  • Blockchain Development: We have expertise in blockchain technology, including smart contract development and decentralized application (DApp) creation.
  • IoT Development: Our Internet of Things (IoT) development services encompass connecting physical devices to the digital world.

Navdeep Garg
Article written by

Navdeep Garg

I'm founder and CEO of Revinfotech Inc. I traits in leadership and brilliant practitioner in the Financial Services and FinTech. I helped ban in connecting to the FinTech ecosystem through payment acceptance in blockchain as a service and even help i... read more

Do You Have an Exciting Project Idea in Mind?

We can help you bring your project to life on an affordable budget. Contact us!

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.