Hire Experienced Tokenization Lawyers
Individuals or businesses/entities that need legal help with tokenization, from tokenizing certain assets to tax assistance and other compliance issues with newly tokenized assets, need an experienced team of tokenization lawyers and experts. Contact our expert team for tokenization solutions.
Tokenization at a Glance and the Need for Legal Expertise
Tokenization utilizes blockchain to transform the value of an actual asset digitally (into a digital token). The new token represents the actual value of an asset digitally. Tokenization has been embraced by many industries. Tokenizing assets comes with many benefits to companies, investors, clients, and the public. However, you need a law firm with tokenization experience, which is a challenge.
Luckily, our team of lawyers and consultants at Blockchain Lawyer understand tokenization and related technologies in every aspect, from utilizing the technology to the compliance risks.
We know how to tokenize assets, the tax obligations of tokenization, how tokenization affects business operations, and more. Don't wait for legal uncertainties. Talk to us and enjoy all the benefits of tokenization minus common risks.
Definition of Tokenization, Goals & More
As mentioned, tokenization converts a physical asset or something valuable into a token. Tokens are stored in a database that records the connection between the physical asset and the corresponding token. Tokenization is particularly useful for entities that deal with highly sensitive data.
After tokenization, tokens can be utilized for normal business operations while the sensitive aspects of the underlying asset are kept securely. Industry best practices call for storage to be far from the entity's accounts and systems i.e., on the blockchain.
Tokenization aims to replace sensitive information with a token that can't be deciphered. Most importantly, the token can be used without fearing breaches. A perfect example would be credit card usage.
Every time a credit cardholder uses their card to pay, a token can be used to represent the actual card number. In this case, tokenization permits payment processors to process payments without accessing your information.
Applications of Tokenization
Many industries have already started tokenizing assets. The most notable industries are those that handle sensitive information such as patient details, client payment details, and other confidential client information.
Tokenization in Accounting
The accounting industry embraced tokenization before many other industries. Accountants process a lot of personal/confidential information for their clients. Through blockchain technology, it is possible to process and store such information via a secure system.
Tokenization in Banking and Finance
Banks and financial institutions haven't been left behind. These industries also handle sensitive client data daily. Tokenization allows customer data to remain secure from theft and breaches. Besides upholding confidentiality, tokenizing information lowers cost and transaction time for global transactions.
Tokenization Applications for Regular Businesses
Typical businesses can also benefit from tokenization. For instance, business activities where personal information is used – management meetings, shareholder issues, loan transactions, financial details, etc. – can benefit from tokenization.
Blockchain and tokenization can also safeguard businesses from fraudsters, mismanagement, insider trading, and more. Businesses that process sensitive data like confidential products or do identity verification also stand to gain from tokenization. Blockchain-secured systems store data and allow management and authentication of that data safely and securely.
What's the Difference between Encryption and Tokenization?
In encryption, the code is altered, but the original form remains in the new code. To decode encrypted data, you must use a key. All parties to a transaction need the key to decode the encryption. Without the key, it's incredibly difficult to decrypt data.
Tokenization eliminates the sensitive aspects of original data and transfers those aspects to the blockchain. Some insignificant token replaces the original form to allow continued business operations. Since the token is insignificant and the original data can't be deciphered, hacking attempts won't matter since the original form is unrelated to the token.
Benefits of Tokenization
There are many benefits entities and individuals stand to enjoy from tokenization. The most notable include:
- Increased security/safety translates to lower risk of theft and data breaches
- Easier payment solutions
- Higher transaction speeds due to automation
- Increased liquidity
- Increased access to investment opportunities and access via partial ownership
- Promotes e-commerce and other financial innovations
- More transparency than encryption since keys are stored in the cloud and not within an organization
- Reduced human labor and judgment errors
- Saves money and time for businesses and individuals
There are more benefits of tokenization and blockchain for businesses. For more on tokenization and how it can help your business, talk to our experienced tokenization and blockchain team today. We also offer tokenization solutions to those who face a variety of tokenization problems.
Get Legal Tokenization Advice
Tokenization has caught the attention of many individuals and businesses. Many are looking to understand how tokenization works to utilize its benefits. Tokenizing confidential/sensitive data increases information security. Even if data is breached on a tokenized version, sensitive information can't be stolen since the original is stored far from business operations.
However, tokenization is still in the formative stages. There are also risks that should be considered before utilizing the technology. The importance of expert advice can't be overlooked, especially when transitioning to tokenization for major transactions.
Blockchain Lawyer has a tokenization solutions team composed of blockchain attorneys and consultants in various fields who understand everything about tokenization, from the meaning to applications, benefits for specific industries, risk, and more.
Contact us today and get a free tokenization consultation to answer all your questions.
