Bittime - Currently, the market is starting to look at Real World Assets (RWA) as a new investment opportunity. MANTRA CEO, John Patrick Mullin, recently spoke with DailyCoin about the development of RWA and the role of the Cosmos blockchain in the future of this asset.
Blockchain technology is growing rapidly, not only in the world of cryptocurrency, but also penetrating the traditional investment sector. Recently, interest in real-world assets (RWA) being converted to digital (tokenization) has been increasing.
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This great interest began with the latest launch of investment company BlackRock which focuses on digital assets (tokenized assets). The fund attracted millions of dollars in investments.
Then, making some market players believe that asset tokenization is the best solution that combines the stability of traditional investments with the potential of new technology.
Real World Asset (RWA) Platforms Are on the Rise
Although the concept of real world assets (RWA) has been around for a long time, the rise in interest only began on March 20, 2023 when BlackRock launched the BUIDL fund specifically focused on digital assets. This fund was considered successful because it was able to attract investments of $240 million in a week.
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Digital assets linked to property and other real assets offer investors the advantage of stable income. According to KuCoin's monthly report , this is one of the factors in the increasing interest in RWA, and has led to an increase in projects focused on digital assets.
MANTRA: Digital Asset Pioneer on Blockchain Cosmos
One company working in this field is MANTRA, a Cosmos-based layer-1 blockchain focused on RWA.
MANTRA CEO, John Patrick Mullin, spoke to DailyCoin reporter David Marsanic about how his company sees the RWA opportunity and where this digital asset is headed.
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Digital Assets Will Change the Game
John Patrick Mullin explains that digital assets are representations of real or intangible assets on the blockchain. Thus, the function of these assets becomes broader.
In this case, MANTRA is working to create seamless value transactions between the real world and the blockchain world.
This belief in the potential of digital assets was also expressed by BlackRock CEO Larry Fink, who had been talking about it years before the launch of the BUIDL fund.
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“The new generation of financial markets will be dominated by the tokenization of securities,” Fink said. Tokenization will provide a distributed ledger for all owners and sellers as well as instant settlement of transactions, and this "changes the entire ecosystem."
MANTRA's CEO then reminded that there is still a lot that needs to be done before RWA reaches its maximum potential. "The current system is not perfect," Mullin said, "there are many technical and regulatory considerations that need to be addressed."
MANTRA and Potential of Digital Assets in Dubai
MANTRA sees an interesting opportunity to implement RWA in the United Arab Emirates (UAE) property market. According to them, the biggest benefit of asset tokenization is the ease of obtaining loans.
"They managed to sell their newest property for more than $1.5 billion in six months... Right now, they have to borrow from the bank at 8% interest, which is a huge amount if the project they are running is worth $1.5 billion," explained Mullin .
With RWA, companies can apply for loans on a case-by-case basis, making the process simpler and potentially reducing loan costs.
Other companies are also starting to exploit this potential. Bitfinex Securities, a Tether affiliate company, launched the first such project in El Salvador on April 11. The digital asset will be used to fund the construction of a $6.25 million Hilton hotel near the nation's airport.
However, implementing tokenization cannot be done haphazardly. Mullin argues that for tokenization to be successful, it must “increase access, reduce costs, remove barriers, increase liquidity,” or provide added value in some other way.
"Not everything will see a significant increase in value just because it is tokenized," he added.
"In some cases, tokenization can actually make things worse," he continued. This is important to underline given the regulatory and technical complexity of tokenization.
UAE Regulators Are Very Open to Digital Assets (RWA)
Regulatory clearance, especially at the application layer, is an important consideration for RWA. Mullin said that MANTRA is in talks with UAE regulators to obtain a license and they believe regulators there are more open to blockchain initiatives.
"The process is complicated," Mullin said, but the situation is made easier because "the regulators there are very open to feedback and constructive discussions to develop something new."
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"We believe we have entered the final stages of the licensing process, which will allow us to establish an on-chain brokerage and asset investment management business in the UAE," he continued.
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Also read:
MANTRA ($OM): Ready to Take Off in the RWA Token Boom?
RWA Tokenization on a Large Scale Not Feasible Yet?
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