How Tokenization and Blockchain could Democratize Finance

One of the most exciting applications of blockchain is asset tokenization, and its potential to democratize access to investment opportunities is nothing short of transformative.

Asset tokenization and Blockchain technology Investment

Historically, impact investing, which seeks positive social and environmental outcomes alongside financial returns, has primarily been accessible only to high-net-worth individuals and institutional investors. Minimum investment thresholds can be therefore significant, and access to investment opportunities is thus often limited due to a lack of transparency in deal sourcing.

How Asset tokenization could disrupt this status quo in several ways ?

• Fractional Ownership:By splitting assets into smaller tokens, tokenization allows investors to participate with less capital. This opens the door for a wider range of individuals to contribute to causes they care about, even with limited resources.

• Increased Liquidity : Traditionally, alternative assets like private equity or real estate are illiquid, meaning they can't be easily bought and sold. Tokenization facilitates trading on secondary markets, potentially 24/7. This increased liquidity benefits both investors seeking exits and those looking to enter the market.

• Transparency and Efficiency : Blockchain technology provides a secure and transparent record of ownership and transactions. This reduces reliance on intermediaries, potentially lowering fees and streamlining processes.

• Global Accessibility: Tokenization removes geographical barriers. Investors worldwide can access a broader range of investment opportunities, fostering global diversification and potentially higher returns.

The benefits extend beyond impact investing. Tokenization can democratize access to other alternative assets like venture capital, private debt, and even fine art. This allows investors to diversify their portfolios beyond traditional stocks and bonds, potentially mitigating risk and enhancing returns.

Of course, challenges remain. Regulatory frameworks are still evolving, and investor education is crucial. However, the potential of asset tokenization to democratize investment is undeniable. By lowering barriers and increasing transparency, it can empower a new generation of investors to make a positive impact on the world, while building their own financial security.

Our investments are an extension of our values

As we navigate this complex investment landscape, it's vital to remember that our investments can be an extension of our values. This means seeking opportunities with clear and demonstrable impact. We can achieve this by investing directly in projects or companies that address pressing issues like climate change, social inequality, and the root causes of illegal migration in low-income countries.

My honest opinion about ESG ETFs & Funds

In the realm of modern finance, Environmental, Social, and Governance (ESG) investing has taken center stage, presenting what appears to be an ideal intersection of values and value. ESG ETFs and funds have proliferated, promising investors the golden opportunity to align their portfolios with their principles. However, as we delve deeper, a critical question emerges: Do these ESG solutions truly make a tangible, traceable impact in addressing global warming?

“ With more funds labeling themselves as 'sustainable' or 'green,' it becomes increasingly challenging for investors to discern genuine ESG commitments from mere marketing tactics. ”

As a former Portfolio Manager at one of the most prestigious banks in Belgium, I was initially enthusiastic about the EU-SFDR regulation concerning Sustainable Finance. But when confronted with how it was presented to clients and the composition of ESG funds that included companies like Total Energies, my enthusiasm quickly waned.

My primary concern with listed ESG investments, such as ETFs and funds, is their lack of traceability and transparency. Investors often find themselves in the dark about where their money is going and whether it's genuinely making a positive impact on the lives of real people — people with faces, names, and real locations. When you invest in these ETFs, your only certainty might be about whom the fund management fees went to. If we want to reverse climate change, mitigate migrations, and curb illegal businesses such as human and drug trafficking, this gap in information must be addressed.