# Characteristics of a tokenized asset

Tokenization of assets is the conversion of real assets into digital assets.

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Tokenization does not change the original asset, but the way its **ownership** is managed.

**Ownership** is the key word here, as tokenization allows for both proof of ownership and fractional ownership.

Some **examples of what can be tokenized**: **corporate debt and equity, loans, credit notes and invoices, judicial assets**, precious metals, art (physical and digital), **funds** (providing liquidity and participation), collectibles (physical and digital), real estate (commercial, residential), intellectual property (patents, licenses), commodities and energy, and certificates.

#### **What are the benefits?**

* **Wider geographic reach:** public blockchains are inherently global in that they present no external barrier to global investors. Today, it is very difficult for an investor from a developed country (around 4-5% interest rate) to invest in the high-yield capital market of Latin America (> 15% interest rate). Using tokenized assets, this process can be done with a few clicks.
* **Increased liquidity:** capital market assets are a very illiquid type of asset, but tokenization fractionalizes them and unlocks liquidity potential by lowering the minimum investment amount, making the asset tradable in secondary markets, and allowing a broader base of investors to participate in the ecosystem.<br>

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* **Shorter settlement times**: tokenization can shorten transaction times and it enables round-the-clock trading, as smart contracts triggered by predefined parameters can complete transactions instantly. On the **AmFi** platform, settling a lending pool can be 10 times faster and 70% cheaper than a similar mechanism used in today's standards.
* **Infrastructure upgrade**: for many asset classes, fundraising and trading remain slow and difficult, requiring the exchange of paper documents. Digitizing these assets on a Distributed Ledger Technology (DLT) infrastructure can significantly improve the efficiency of these markets, with increased impact in areas where traditional infrastructure does not currently exist.
* **Improved asset-liability management**: tokenization will improve the ability to manage asset liability risk through accelerated transactions and improved transparency.
* **Regulatory development**: regulators are showing increasing signs of wanting to establish regulatory frameworks for the generation and exchange of digital asset tokens.

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Learn more about the advantages of tokenized assets [here](https://docs.amfi.finance/home/participants/investors/enhanced-debt-financing-products).
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