What she is saying: Former 21Shares co-founder Ophelia Snyder argues that cryptocurrencies and traditional finance do not understand each other when it comes to tokenization.
- Tokenization solves real problems related to settlement avenues and the movement of assets, Snyder said.
- The biggest challenge is integrating blockchain-based assets with the systems already used by banks, brokerages and asset managers.
- Existing discussions often overlook the operational processes that occur after a trade is executed and before assets are fully liquidated.
- Snyder joined CoinDesk’s Jennifer Sanasie at Public Keys.
The gap: Snyder said blockchain companies have largely addressed transaction performance, but not the broader operational requirements of financial institutions.
- Questions remain about how tokenized assets fit into books and records systems, compliance workflows, and regulatory reporting.
- Financial institutions must also rethink risk management frameworks if tokenized assets can be traded 24 hours a day.
- Many companies rely on third-party software providers that have not yet adapted their systems for native blockchain transactions.
Why it is important: Snyder believes the industry’s biggest challenge is scale, not functionality.
- A tokenization project can operate at a limited scale and still struggle to support the volume of the US capital markets.
- “A billion dollars is nothing when it comes to traditional financial flows,” Snyder said.
- Moving large amounts of bearer digital assets on behalf of clients requires much more oversight and controls than existing book-entry systems.
