Tokenization of real-world assets (RWA) can expand investment access for individual traders, similar to how ETF funds helped the public access financial instruments when they first launched in 1993. This is the view of Mr. Christopher Perkins, President and Managing Partner at CoinFund.
"I believe that tokens are the new generation of ETFs," Mr. Perkins shared in an interview with Cointelegraph. According to him, tokenized RWA assets – which can be traded 24/7 on global markets – help mitigate the information asymmetry that is a barrier to retail investors accessing private investment products under current regulations.
"Ordinary people cannot access the private market. The nature of this market is privacy," he added. "In the U.S. today, about 81% of companies with revenues over $100 million are private companies – according to statistics from BlackRock. This means that people can almost not access the companies that are innovating and growing the fastest today."
Tokenization of RWA is seen as a prominent application of blockchain technology. It not only increases the speed of capital circulation but also allows for fundraising by fragmenting assets, creating new collateral types for DeFi applications, reforming the current capital formation model, and democratizing access to the global financial market.
Traditional public investment opportunities are narrowing.
"The public market is currently facing a serious crisis. The system no longer operates as originally designed," Mr. Perkins stated.
According to him, the number of publicly listed companies in the U.S. has decreased by nearly 50% since the 1990s. "We are raising less and less capital in the public market – this is completely unreasonable," he emphasized.
While the number of private companies and their total market capitalization is increasing, retail investors are still being excluded from this playing field.
Recently, the brokerage platform Robinhood has launched a feature for trading tokenized stocks for customers in Europe. As part of its strategy to expand into tokenized stock, Robinhood has also announced it will distribute a small amount of tokens representing 'private equity' in OpenAI and SpaceX to users.
However, these tokens only provide the ability to track the value of private companies, not representing any ownership or voting rights in the business.
OpenAI has also warned users that these tokens are not issued by them, not approved by the company, and do not represent equity in the company.
Despite these warnings, Robinhood CEO Vlad Tenev revealed that many private companies are still showing interest in listing their shares in tokenized form on this platform.