Edwin Mata, CEO and co-founder of Brickken, discussed the cooperation with EU regulators and the potential of the technology. “A few years ago, the idea of ​​a fully tokenized world seemed like a distant dream,” Edwin Mata said at Cointelegraph’s recent AMA.

“Following the news about the potential of Ethereum ETFs, banks have become more open to exploring tokenization for their portfolios,” Mata said.

“Proof-of-project studies show the potential of tokenization for institutional investors. Institutional participation validates the entire ecosystem and encourages others to participate.”

The speaker emphasized the focus on stablecoins, specifically USDC and Tether’s USDT, as a catalyst for broader adoption. “These currencies have introduced efficiency by facilitating on-chain payments,” he said.

This first wave paved the way for tokenized securities. “We have seen the tokenization of treasury bills, it is estimated that a trillion dollars will be tokenized next year. We are currently in the tokenization phase of equity or debt,” Mata reported.

“This rapid growth highlights the potential of tokenization to make financial instruments more efficient.”

Brickken, featured on the Cointelegraph Accelerator, is designed to simplify the tokenization process and provide companies with tools to manage the entire token lifecycle, from minting to issuance and ongoing management processes.

An open API makes integration with other DApps and protocols easier.

“We are the plug-and-play solution for any company looking to tokenize their assets seamlessly. We believe integrating Web2 assets into the Web3 world should be a matter of a few clicks. This is the philosophy behind our product design,” Mata said, introducing Brickken.

The product, which officially launched in 2023, has more than $230 million in tokenized assets across 14 countries. “We manage the technology layer, and our network of partners provides the necessary legal, marketing and financial services,” Mata explained. This comprehensive approach ensures a legal, efficient and successful tokenization process for our customers.

There is a significant diversity in the platform’s applications. “Real estate remains a popular option for tokenization due to its ease of marketing, but we are also seeing increasing interest from other sectors,” Mata reported.

“For example, we recently led a successful capital raise for a biotechnology company and are working with franchisees seeking international expansion through tokenization.”

The platform is also open to unconventional applications. “We were recently approached by a well-known stone supplier about tokenizing their revenue – we were delighted to support this unique business model,” said Mata.

“We are currently focused on developing solutions for venture capital firms, family offices and asset managers,” he added. “Partnering with established players like Coinbase can help us reach institutional investors.”

The guest speaker predicted that tokenized markets will dominate in the future. “Traditional financial markets will see competition from tokenized alternatives, such as Nasdaq. These new platforms offer benefits such as lower fees, simplified processes and automated back-office functions.”

As a result, companies will face a critical decision over the next decade: Will they list their shares on the traditional Nasdaq or launch a Security Token Offering (STO) on a tokenized market. “The increased efficiency and cost-saving benefits of tokenization could make it a more attractive option for many companies,” he said.

While STOs have great potential for companies, navigating the complex regulatory world can be quite challenging. “For example, launching an IPO requires a lot of bureaucracy,” Mata explained.

“Companies must comply with extensive regulations and overcome many hurdles, especially in highly regulated markets such as the United States. The high costs associated with IPOs in such jurisdictions also deter smaller players.”

Europe offers a more cost-effective alternative, but the process is still bureaucratic. Replicating traditional IPOs with tokenized securities requires compliance with existing regulations.

Despite the obstacles, STOs offer a revolutionary funding approach, especially for entrepreneurs and small companies. “Technology enables companies to do things that were previously impossible,” the speaker said.

“Traditionally, entrepreneurs would source capital from their immediate circle – venture capitalists, family and friends. Now technology allows them to expand that circle and access a wider pool of potential investors, including retail investors. With just a few clicks, a Brazilian “The company could raise capital from investors in Australia – a scenario unimaginable in the era of pen and paper.”

“This is a big hurdle for widespread adoption,” said Mata, who considers the fragmented nature of global regulation to make the possibility of a universal standards approach for tokenized securities unlikely.

But local regulatory efforts could influence global attitudes toward tokenization and create more fertile ground for innovation. The European Commission’s European Blockchain and Distributed Ledger Technologies Regulatory Sandbox, which Brickken recently joined, is one such example.

This provides a space for companies and regulators to discuss regulations and best practices for blockchain solutions, as well as provide legal guidance.

Mata sees such programs as an important tool in building trust. “These safe havens allow us to demonstrate the validity and functionality of tokenization to regulators. We have previously participated in the Spanish regulatory sandbox for tokenized secondary markets. This allowed us to test our technology and develop a compliant application.

By showing how the technology works in a controlled environment, we can identify best practices and address concerns. “Open communication with regulators has been important in shaping our product development,” he shared.