Tokenization is no longer just an emerging digital technology trend. It’s becoming more widely adopted, and its ecosystem is expanding steadily. Many more companies, including Polymath, are now focused on the regulated side of this transformative shift.
We sat down with Vincent Kadar, CEO of Polymath, to talk about how they’re approaching this transformation, what makes their infrastructure potentially useful, and where the tokenization space may be headed in the foreseeable future.
Our conversation with Vincent Kadar is shared below.
Crowdfund Insider: Tokenization has perhaps been the most used buzzword in the crypto space recently. How crucial do you believe it has become in today’s global financial system?
Vincent Kadar: Tokenization has improved the way we deal with assets. It creates a digital representation of a real thing. If you think carefully, in today’s digital world, tokenization could be all-encompassing; you could tokenize everything.
Tokenization makes assets more accessible and secure.
Web3 tokenization is programmable, composable, and operationally efficient. You can embed code into the token and make it capable of engaging with smart contracts. As a result, you get a system with a very high degree of automation.
The presence of tokenized assets on a blockchain means they can interact with other assets and applications on the network. These automated and interactive processes help make systems more efficient and streamlined.
Tokenization in today’s global financial system, therefore, is of immense value. It can help transactions settle faster, cut down operational costs, make data available 24/7, and make access to it more democratic. Blockchain enhances transparency and keeps the structure agile yet robust.
With all these benefits, it’s no surprise that a report from Ripple and Boston Consulting Group predicted the tokenization market could reach at least $16 trillion by 2033 — or even $18.9 trillion with faster growth.
Crowdfund Insider: Polymath has been involved in efforts to digitize real-world assets. How does your platform support the transition from traditional to tokenized finance?
Vincent Kadar: We realized that tokenization was a new concept for many asset holders and investors. So, we focused on offering end-to-end service with the least possible roadblocks. This helped eliminate the hesitation our clients initially faced when deciding what to do next and how to do it most efficiently.
We have built a one-stop shop for simplified, smart, compliant digital investments, where users can mint tokens representing their real-world assets, raise capital efficiently within regulatory frameworks, and manage investors using intuitive tools.
With Polymesh Token Studio, issuers can reserve their security token ticker symbol, configure the token, set compliance rules, and distribute it — all in one place.
Our capital platform caters to every key stakeholder involved in the tokenization process, including asset owners, advisory teams, and investors. It ensures that the creation, management, and trading of security tokens are always compliant, efficient, and secure.
Crowdfund Insider: Since you mentioned Security Tokens, can you elaborate more on what they are?
Vincent Kadar: They are similar to traditional securities — financial instruments that represent asset ownership. The key difference from conventional securities is that security tokens bring access and liquidity to assets that were traditionally considered illiquid. These assets include real estate, fine art, intellectual property, synthetic asset baskets, and more.
You might wonder why these assets require tokenization if they were already tradable in traditional markets. But imagine real estate or expensive art investments that were beyond the reach of modest fund holders. Tokenization enabled fractional ownership and significantly improved liquidity.
Since we are purpose-built, we receive a range of feedback from our clients. Asset management clients, for instance, find us helpful in enabling blockchain companies to meet the needs of capital markets and their participants. Others find our platform effective in improving the efficiency of traditional investment banking processes, as our technology and infrastructure are optimized for regulated markets and assets, making these assets accessible to global investor pools.
With blockchain technology powering tokenization, it’s possible to maintain a perfect digital record of ownership and transactions, reducing record-keeping disputes, foul play, and document backdating.
Tokenization also helps automate payments, improve compliance, eliminate legacy intermediaries, raise funds effectively, reduce settlement times, lower costs, and streamline processes such as issuing dividends, conducting votes, and managing liquidation. Programmable smart contracts and shared ledgers allow for further innovation.
In summary, security tokens bring numerous benefits to both issuers and investors across public and private markets.
Crowdfund Insider: With blockchain at the core of tokenization, infrastructure choices become crucial. What distinguishes Polymath from others working in the same space?
Vincent Kadar: Our technological efficiency draws its strength from the Polymesh network — our purpose-built blockchain for regulated assets. It’s important to explain the notion of “purpose-built.” While we follow a regulatory-first approach to ensure a secure and compliant framework for asset tokenization, our design principles are specifically tailored to the needs of regulators and institutions. We also place a high value on confidentiality, with the network focusing on the privacy of assets, trades, and positions.
Since Polymesh is a KYC/AML-permissioned blockchain, participants can always verify identities with confidence. We have embedded built-in control mechanisms to maintain asset integrity and prevent issues like fork duplication. Additionally, the network’s integrated cross-border regulatory framework supports proper trade execution and enhances liquidity development.
Talk to our clients and you’ll see a range of use cases and benefits. Blockchain companies rely on us to meet the demands of capital markets, which in turn helps asset management firms working with those companies. We also have the potential to significantly improve the efficiency of traditional investment banking processes, as Polymesh is optimized specifically for regulated markets and assets.
Crowdfund Insider: How do you see the tokenized security ecosystem shaping up in the future?
Vincent Kadar: We are highly optimistic. Assets like properties and stocks are moving quickly onto blockchains to improve efficiency and accessibility, resulting in a significant uptick in adoption.
Traditional finance giants like JPMorgan and BlackRock have entered the space, recognizing the value of continuous trading, rapid settlement, and global market reach.
Our expertise positions us well to lead this transformation, but we remain vigilant and proactive. We continue expanding our ecosystem, which includes a trusted global network of partners.
These partners will help power the next generation of tokenized securities across industries, geographies, and specialties. Our Polymath dashboard is integrated with a host of leading advisory firms, law firms, and KYC providers, though clients are also free to use their own services.
We are proud and humbled to have proven ourselves useful to our clients while contributing to the broader industry’s advancement. Our partners collaborate with us because they see the value in our flexible token creation and management solutions — tools that integrate smoothly with other systems and offer issuers a high degree of control over their security tokens.
Securely digitizing assets through tokenization requires a strong, specialized ecosystem. Our partners believe that working with us strengthens that ecosystem. As a network, we’re committed to delivering the full potential of sophisticated technology and regulatory compliance to institutions and users adopting digital asset solutions.