Lack of liquidity, technical complexities impede tokenization: OECD [Video]

A lack of a robust ecosystem, liquidity, industry standardization, and legal clarity are among the key hurdles that keep tokenization from making a mainstream impact, a new report says.

The report by the Organisation for Economic Co-operation and Development (OECD) explored the eight top impediments to tokenization globally, which have kept the sector from exploding despite ambitious targets from experts. Some, like BCG, have estimated that tokenization could unlock $16 trillion in value by 2030, although more recent estimates have been modest, such as McKinsey’s $2 trillion.

The OECD is an intergovernmental organization with 38 members that fosters world trade and economic progress.

At the top of the list of hurdles is a lack of liquidity and the absence of an ecosystem. The report notes that tokenization lacks a critical mass of investors, making issuers hesitant to commit to tokenizing assets. It’s a cyclical conundrum, as investors hesitate to delve into tokenized assets due to a lack of liquidity. …