Government Bonds May Soon Be Tokenized

TL;DR

Full Story

Let’s finish things off today with some news which is less about the markets and more about innovation.

Specifically, we’re going to discuss MarketDAO, who just proposed a competition aimed at onboarding $1 Billion of tokenized assets.

Here’s what that means:

The proposal, which is titled ‘Spark Tokenization Grand Prix,’ invites innovators (i.e. developers) and issuers (i.e. banks, investment firms etc.) to work together to build on top of the Maker Protocol.

To put it simply, they want to make it super easy to invest in things like short-term government bonds, by allowing regular people to buy tokens that represent the bonds, rather than the bonds themselves.

Why invest in tokenized short-term bonds rather than just investing in short-term bonds directly?

Plenty of reasons, but a couple of big ones:

• Fractional Ownership: Investors will be able to own a small piece of a bond, which isn’t usually possible with traditional bonds.

• 24/7 Trading: Unlike traditional markets with set hours, tokenized assets can usually be traded anytime.

• Global Access: Tokenized bonds can be bought from anywhere in the world, which means people in countries with high inflation will be able to get access to financial opportunities in US markets which they never have had access to in the past.

This competition is the latest in a larger trend of moving towards tokenization of digital assets.

So while the world continues to evolve, more innovation continues in the web3 space.

Love to see it!