Tokenization of Assets Challenges Highlighted by VanEck CEO, Portal Raises $34M for BTC Trading

By: Isha Das

According to Jan van Eck, CEO of globally acclaimed investment management firm, VanEck, the tokenization of real-world assets faces two crucial obstacles. Tokenization has the potential to change investment paradigms by increasing transparency, liquidity, and fractional ownership. This said, VanEck points out the need for robust market-making mechanisms and a regulatory sphere that can guide and support such breakthroughs.

Van Eck highlights liquidity provision, specifically "who provides the liquidity?" as one of the main barriers. Despite the various tokenization opportunities, the presence of a buyer and seller doesn't suffice. The provision of a market structure around liquidity is critical, requiring profitable market-making mechanisms.

Regulation is the other major hindrance. There're uncertainties on where to establish a market for tokenized assets without regulatory hurdles. Even though the U.S is witnessing a complicated regulatory climate, Europes's large retail market and friendly cryptocurrency trading regulations makes it a more suitable place for such improvements.

On a separate note, fintech provider Portal raised $34M in seed funding for its decentralized, Bitcoin-based exchange. The platform aims to offer a decentralized infrastructure for peer-to-peer swapping of BTC across various blockchains without the involvement of intermediaries, which increase the risk of hacking.