The world is moving towards tokenization. 

HSBC estimates that by 2030, 10% of the world’s assets will be tokenized and on-chain, while the World Economic Forum believes that by 2030, the total number of tokenized, on-chain assets will amount to the tens of billions. 

Blackrock CEO, Larry Fink, underscored this by opining that the next generation of wealth and securities will be the tokenization of securities. 

While the world is moving towards tokenization, the current cryptocurrency infrastructure is severely lacking and ill-equipped to deal with this tectonic shift. 

Lack of Licensing

To list on a cryptocurrency exchange, it is necessary to fill out a non-securities declaration. 

The problem is that raising money through the issuance of a platform token is increasingly seen as a way of being a security, not a mere currency like you find on an FX Exchange. 

To deal with securities, either as an agent or principal, you must have a securities dealership license. To attain these, a robust set of criteria must be met, without which you cannot sell to users. 

Regulatory Crackdown 

Binance has been shut down in the Philippines at the request of the Philippines Securities and Exchange Commission. Huobi has seen its site shut in Malaysia. 

Various jurisdictions are increasingly cracking down on unlicensed platforms due to unlicensed and unregulated activity, in the same way that the US SEC recently came after Binance and a number of other platforms. 

Safeguarding Customers 

If Binance goes down, who can you chase for redemptions? How can you get your funds back? 

In effect, there is no legal way. 

Proof of Assets and Proof of Reserves can both be manipulated. Moving assets in and out of a designated wallet or a vault can be done with ease, but how can you prove those assets really belong to an exchange? 

This is where licensing and regulation become increasingly important. 

What Can Be Tokenized? 

Anything can be tokenized. 

Imagine becoming a Limited Partner in a VC, a landlord in Singapore, or a fast-food chain owner in the Philippines. All of this is possible through fractionalization and tokenization. 

Much of this is attempted via non-fungible tokens, but the problem lies in a lack of local government recognition and an absence of licensing. 

This is the casus belli of NexStox & NXMarket and what we do. 

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