The role of tokenisation in the next financial crisis

Financial crises usually spark new ideas, affecting investment markets and how people view money, risk and value. Each catastrophe, from the South Sea Bubble in the 1700s to the Great Depression in the 1900s and the 2008 global financial crisis, has highlighted how susceptible the financial system was and, as a result, demanded new regulations and procedures. As the world explores tokenisation (the process of translating asset ownership rights into blockchain-based digital tokens), we are again on the verge of transformation and being able to track and monitor assets in real time. It is not if tokenisation will change finance, that is obvious, but how tokenisation will play out in the next financial crisis which is most essential. Will it make markets more stable by increasing accessibility, liquidity and openness? Will it worsen shortcomings by adding risks, spreading disease faster and involving regular investors in intricate assets they do not understand?

Major financial crises

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