Illiquid assets are those resources that cannot be sold without the owner losing a significant amount in their value. It will be a challenge for a person to sell them due to lack of an interested buyer or investor. By extension, a company may be rendered illiquid if it doesn’t maintain the applicable debt status from lack of funds.
Without buyers, the pricing of an illiquid asset is affected irrespective of its value. You will encounter loss especially if you are looking for a quick sale of the illiquid assets. Examples of illiquid assets include private company interests, cars, house and antiques among others.
What is blockchain technology?
This is a process of digitally signing and recording data to keep records of all transactions for authenticity. This approach aims to foster a high level of during business transactions. Using blockchain technology facilitate transparent transactions on illiquid assets. This is because illiquid assets are difficult to physically breakdown or transfer using the traditional financial services.
This new technology comes with an introduction of tokens to represent the right of ownership of the traditional assets. The blockchain technology is meant to resolve risks associated with fractional ownership of high-value properties.
Jebril Network is an example of companies that facilitate the use of blockchain technology in transacting on illiquid assets. Example of assets that the network deals with are equities, currencies, bonds and high-value commodities. Using these network, you can store, transfer and manage your illiquid assets at a significantly low cost. It also further creates a high-security level and trust for the investors.
The tokens that the network create represent the real value of the illiquid assets known as CryptoDepository(CryDRs) Receipts. You can use the CryDRs to trade, make payments globally and remittances. The tokens are known to promote trust and security, especially when dealing with high-level stockholders. This technology affirms transparency and legitimacy to handle transactions with grey areas.
The whole concept of blockchain technology is to create new and reliable strides in making investments. The technology helps to reconcile the crypto economy with the traditional one for better trading grounds.
This new revolution is making it easy for people to freely invest at low costs with less complex legal requirements. The blockchain concept helps to maintain the high value of the illiquid assets even during trading. This reduces losses possible by the owner during a quick transfer or sell.
Conclusion
Using blockchain technology when transacting illiquid assets facilitates high-security levels creating confidence in the investors. There’s no need of one to worry about the operational and physical security as the processes are digitized. The technology basically helps to reduce losses that could otherwise be incurred when dealing with traditional transactions.
This new technology aims at ensuring more security, opening the market even for new investors at relatively low costs. Blockchain technology makes it convenient and secure to facilitate your investment procedures.