Debts
Tokenization
Tokenization of debts, bonds, receivables and loans is a process of representing these financial obligations as tokens on a blockchain.



In few steps
Valuation and conversion to tokens
The first step in tokenization is the valuation of the debt, bond, claim or loan. Once this value is determined, it is converted into a proportional number of digital tokens. Each token represents a fraction of the total value of the financial obligation.
Issuance of tokens
Tokens are issued on a blockchain, a distributed ledger technology that allows transactions to be tracked and verified in a transparent and secure manner.
Selling and trading tokens
Tokens representing the debt, bond, claim or loan can then be sold or traded. This allows investors to buy and sell these financial bonds in a more flexible and efficient manner. This step also need marketing and communications process to works well.
Legal management
When an investor purchases a token representing a debt, bond, receivable or loan, they acquire the associated obligations. For example, if an investor buys a token representing a debt, the investor is obligated to repay a portion of that debt according to the terms of the contract associated with the token.
Examples
A company with significant debt could tokenize that debt to make it more manageable. The tokens could be sold to investors, who would then assume a portion of the repayment obligation.
A municipality could tokenize its bonds to raise funds for public projects. Investors who purchase these tokens would receive a return on investment when the municipality repays its bonds.
A lender could tokenize a portfolio of student loans. Investors who purchase these tokens would receive a portion of the interest and principal payments made by the students.
A company that has a large number of receivables (such as unpaid invoices from customers) could tokenize these receivables. Investors who purchase these tokens would then be responsible for collecting the receivables.
A bank could tokenize a portfolio of mortgages. Investors who purchase these tokens would receive a portion of the interest and principal payments made by the mortgage borrowers.
Main advantages
Increased Liquidity
Tokenization facilitates quick transactions and opens the market to more investors, thereby increasing liquidity.
Fractionalization
Tokenization makes debt investing more accessible by allowing the purchase of small fractions of an asset.
Transparency and Security
Thanks to the blockchain, tokenization offers greater transparency of transactions and enhanced security.