Despite gaining global attention recently, traditional exchange-traded funds (ETFs), including spot bitcoin ETFs, are deemed less advantageous compared to tokenized real-world assets (RWA), as expressed by Zaid Ismail, the Chief Operating Officer (COO) at the forward-looking blockchain company, Mintlayer.
According to Ismail, the trading of tokenized RWAs stands out from regular ETFs as it is not limited to conventional working hours. Moreover, these blockchain-based digital tokens representing physical and traditional financial assets offer distinct benefits over ETFs, such as enhanced liquidity, global accessibility, and real-time transactions. Tokenized RWAs also boast increased transparency, reduced costs, and direct ownership, making them a more flexible and attractive option for contemporary investors seeking portfolio diversification.
Despite their apparent superiority, the future success of tokenized RWAs hinges on global regulatory collaboration and the standardization of rules governing such assets. Ismail emphasizes that the involvement of traditional financial institutions in embracing this innovative approach to handling valuable assets will play a crucial role in the success of tokenized RWAs.
Meanwhile, in responses shared with Bitcoin.com News via Telegram, the COO of Mintlayer elaborates on why developers should consider building decentralized finance (DeFi) apps on the Bitcoin network. He also discusses common challenges in blockchain, such as network congestion, high transaction fees, and the complexities of running nodes, and how these factors impede the technology's widespread adoption