Revisiting Asset-Backed Securitization in the Digital Era: The Role of Blockchain and Tokenization

Abstract

Amid the ongoing digital transformation, blockchain technology has emerged as a key innovation in the financial sector. One of its most promising applications is asset tokenization, which enables the digital representation and fractional ownership of financial assets.

This study explores how the blockchain and asset tokenization can enhance the Asset-Backed Securitization process. In our research, we conduct a comprehensive literature review and present a case study highlighting the adoption of blockchain technology in financial institutions for securitization purposes. Based on these insights, we propose an ABS to incorporate blockchain and tokenization into the securitization process by increasing transparency, operational efficiency, and acceptability for investors.

Our findings show that this technological approach can significantly enhance the performance of ABS by reducing operational risks, improving data integrity, and promotes boarder investor participation through fractionalization. It contributes to a more resilient and inclusive financial system.

JEL Classification: G10, O16, O31

Paper type: Theoretical Research