Tokenized financial products tied to traditional assets, issued via blockchain, promise innovation — but also introduce structural and systemic risks. Key concerns revolve around the identity of the issuer, the clarity of ownership rights, and the linkage to crypto markets.
Regulators worldwide highlight:
- Investors may be unclear whether they are purchasing the actual underlying asset or only a representation via token, raising transparency issues.
- Counterparty risk increases when traditional finance regulation intersects with decentralized crypto infrastructure.
- Liquidity mismatch between tokenized products and classical assets can lead to value volatility and redemption difficulties, especially in stressed markets
- Regulatory and legal frameworks are still developing, which may impact investor protection and rights clarity.
