Money2020 Addressing interoperability issues in the tokenization industry is crucial
Pallavi Thakur, Director of Strategy and Innovation at Swift, and Julien Clausse, head of Asset Foundry at BMP Paribas, presented their perspectives on tokenization at the Money20/20 conference.
During their collaborative session, Clausse and Thakur acknowledged the significant challenges of interoperability faced by tokenization platforms, emphasizing the need for solutions at various levels.
Thakur, drawing from her recent presentation, highlighted interoperability as a major obstacle in the tokenization landscape. She noted that tokenization platforms often create isolated networks or “islands” that lack inherent communication capabilities.
“Tokenization is on the rise and has the potential to revolutionize the securities market,” Thakur stated. However, she pointed out the crucial issue of isolated networks hindering seamless communication.
These isolated networks pose interoperability challenges at different levels: the network layer (facilitating communication between networks), the token format layer (ensuring token compatibility across networks), and the data layer embedded within tokens, Thakur explained. Resolving these issues is vital for the smooth functioning of tokenization.
Both speakers stressed the importance of overcoming the fragmented blockchain environment with its multi-leveled challenges for the success of tokenization.
Clausse echoed the sentiment, attributing the complexities of achieving true interoperability to the diverse nature of blockchain projects. He emphasized the necessity for common networks and standardized adoption within the tokenization industry.
According to Clausse, establishing industry-wide standards across diverse blockchains is essential for the future of tokenization, requiring consensus among industry stakeholders and practical applications.
Thakur and Clausse also underscored the significance of practical use cases and industry standards in shaping the future of tokenization.
“There are currently numerous standards in place,” Clausse noted. “Therefore, everyone is striving to adhere to unique standards.”
The speakers cited examples of industry standards being followed, such as the tokenization of small-scale renewable energy projects by Swift, resulting in more efficient and transparent financing and management. They urged collaboration within the crypto industry to address interoperability challenges collectively.
