#programmable finance

➤ Tokenization is evolving into a practical business tool, converting real-world assets into digital tokens on blockchains to enhance liquidity, automate settlement, and enable programmable finance. ➤ The market for tokenized RWAs is experiencing significant growth, driven by institutional adoption and improvements in regulatory clarity, with projections indicating multi-trillion-dollar potential. ➤ Key business value drivers include creating liquidity for illiquid assets, enabling fractional ownership, faster settlement, reduced operating costs, and enhanced transparency and programmability.

➤ Bitcoin is positioned as a scarce digital money and settlement asset with a focus on simplicity and durability, while Ethereum serves as a programmable settlement layer for applications, DeFi, and tokenized assets. ➤ The article highlights Bitcoin's strengths in monetary clarity and institutional adoption via ETFs, contrasting with Ethereum's programmability and staking capabilities, while acknowledging the complexity and risks associated with Ethereum's broader functionality. ➤ Ultimately, the choice between Bitcoin and Ethereum depends on user needs: Bitcoin for monetary hardness and simplicity, Ethereum for programmable finance and application exposure, with a view that they can be complementary rather than direct substitutes.

➤ Tokenization and programmable finance are moving beyond experimentation into real-world implementation, with stablecoins and tokenized assets facilitating significant settlements. ➤ The success of tokenized finance hinges on connectivity and interoperability between various participants and networks, rather than just technological advancements. ➤ Projects like BIS's Project Agora and SWIFT's CBDC gateway demonstrate the potential for reshaping cross-border payment infrastructure through collaborative, connected architectures.

➤ J.P. Morgan Asset Management and Kinexys highlight tokenized Money Market Funds (MMFs) as crucial building blocks for institutional digital finance. ➤ Tokenized MMFs are projected to significantly reduce settlement friction and offer enhanced features like 24/7 transfers and daily dividend distribution. ➤ The evolution of MMFs signifies a shift towards programmable, real-time liquidity infrastructure, tokenizing liquidity itself rather than just assets.

➤ Anchorage Digital has launched an agentic banking infrastructure enabling AI agents to transact across traditional and crypto payment networks, aiming to unlock trillions in AI-enabled commerce. ➤ The infrastructure, developed in partnership with Google Cloud, provides AI agents with verifiable identities, spending limits, and auditability for regulatory compliance. ➤ This move signifies a broader industry trend towards embedding AI and automation into regulated financial systems, though regulatory and scaling uncertainties remain.

➤ Tokenized real-world assets have reached nearly $30 billion in value, with a growing institutional shift towards programmable finance and its use cases in collateral, lending, and staking. ➤ Institutions are increasingly interested in deploying capital efficiently through blockchain-based systems, reducing reliance on traditional intermediaries and reshaping liquidity movements. ➤ Surveys indicate strong institutional demand for tokenized finance strategies, particularly in staking and lending/collateralized loan structures, signaling deeper integration with programmable financial systems.

➤ This book, 'From Wall Street to Chain Street,' by Li Zhengwen, offers a comprehensive guide to Real-World Asset (RWA) tokenization, positioning it as a fundamental transformation in global finance. ➤ It details how major financial institutions are migrating trillions in assets onto the blockchain, exploring regulatory frameworks in key jurisdictions and the underlying infrastructure required for this shift. ➤ The book aims to serve as a 'Professional's Playbook' for navigating the burgeoning $16 trillion tokenized economy and preparing for a future of programmable finance.

➤ By 2030, financial markets are predicted to operate with significantly less friction, enabling near real-time settlement and more efficient asset movement across applications and jurisdictions. ➤ The transformation is driven by programmable finance, where assets carry embedded rules for compliance and automatic transaction execution, leading to a more transparent and automated system. ➤ This shift aims to democratize access to institutional-grade financial products globally, powered by stablecoins and high-performance blockchain infrastructure, ultimately creating a unified, interoperable financial network.