According to the Bermuda Monetary Authority (BMA), the convergence of tokenisation with Bermuda’s traditional insurance-linked securities (ILS) sector presents opportunities to enhance liquidity, reduce transaction costs and expand access to insurance risk transfer across the British overseas territory.
Asset tokenisation, which signifies a transformative method within blockchain-based digital asset representation, is attracting significant interest within the industry.
However, the BMA cautions that this attraction underscores the need to understand the far-reaching implications of tokenisation, including its risks and opportunities.
In its recently published discussion paper, the BMA clarifies that asset tokenisation refers to the digital representation of a Real-World Asset (RWA), which can be either tangible or intangible, utilising Distributed Ledger Technology (DLT).
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