New Report Claims Blockchain to Generate $400B in Global Financial Revolution
The biggest financial firms and tech industries are opening up to the transformational potential of blockchain technology and the billion-dollar opportunities of the tokenization sector. Colin Butler, the head of institutional capital at Polygon has recently projected that blockchain has the potential to print more than $400 billion in revenues for asset management firms.
Butler noted that the biggest money printers are sectors such as tokenization and fractionalized distribution of private assets. Butler gave an interview exclusively to Cointelegraph noting that the overall financial industry is on the verge of introducing new products and services that are based and backed by blockchain protocols.
The executive retained that this technology has the potential to disrupt the landscape of the international financial sector at a fundamental scale. He joined Polygon after 20 years working for Wall Street. During his career, he worked for investment firms such as KKR. KKR is one of the companies that have already forayed into tokenization via various blockchain startups.
One such example is the tokenization of healthcare funds using Avalanche native DeFi protocol Securitize. The executive explained that tokenization does not have a basis in speculation and crypto rather it has moved ahead of the redesigning of the global financial infrastructure using blockchain.
Blockchain’s Impact on Financial Systems
Speaking on the matter, Butler talked about some examples to highlight the transfer of blockchain technology into mainstream institutions. He noted that Siemens Electronics have issued tokenized bonds on Polygon in February 2023 that reduced settlement time from 7 to 1 day. On this account, the German firm was able to retain millions of dollars as savings that were otherwise spent in transaction costs.
He noted that the main benefit of this method is that it frees institutions from retaining capital reserves for longer time frames. The next example was international asset management firm Franklin Templeton which tokenized the native money market fund leveraging Polygon in April, 2023.
Polygon to Introduce Cybersecurity
In this manner, the firm was able to increase its cybersecurity and introduce faster transactions. At the same time, the project was able to decrease costs by shifting to a layer-2 scaling protocol at the Ethereum network.
He noted that in this manner, investors were able to make continuous transactions within the blockchain network rather than constantly exchanging between fiat and cryptocurrencies via native tokens issued by the money market fund. Next, he talked about Hamilton Lane which tokenized fund offerings for investors falling into a $1 million to $30 million bracket.
He claimed that this has created ease for investors who otherwise have to lock funds for years, avoid capital calls, and deal with lengthy and manual administrative processes. Hamilton Lane started offering tokenized access via Polygon in May 2023.
Rise of Polygon Active Users
Polygon protocol reportedly acquired 15 million users, on par with the Ethereum blockchain while Bitcoin ranks 3rd with 10.65 million as per Flipside statistics. However, the scaling solution recently cited staff cuts citing issues with internal restructuring measures. Polygon Labs CEO, Marc Boiron announced recently that the firm is planning to lay off 100 employees.
The CEO noted that 60 members of the team will take a leave to enhance the overall performance as per a new blog post update on 1st February. The CEO retained that the layoffs did not account for financial reasons but were part of the plan to create a better surgical team that has less bureaucracy.
The platform has continued to rally boasting a strong user base. However, MATIC the native currency of Polygon declined from $0.88 to $0.85 after the Polygon Foundation opted to offload 9 million tokens valued at $7.75 million.
Data projections from Spot on Chain reported on 14th February that wallets associated with the Foundation sold 15.5 million $MATIC to Binance during the last 5 days. An analysis report published on tradingview.com opines that MATIC prices may dip if the buying pressure continues to decline.
Another report published by CryptoDaily suggests that MATIC prices may not cross the $3.92 ATH since 2021 after Bitcoin halving 2024 citing investors opting for less risky assets on account of economic uncertainties.
