Asset Tokenization 101: Navigating the Process, Legal Frameworks, and Future Trends

Jonathan Bench | Kirton McConkie PC

Jonathan is a Shareholder in the International Practice Group at Kirton McConkie, based in the firm’s Salt Lake City office. He focuses his practice on both international and domestic business transactions, assisting entrepreneurs, companies, and financial institutions, including venture capital and private equity funds. His global clientele spans Asia, Europe, the Middle East, Africa, and the Americas. Jonathan has worked and consulted in the U.S., Asia, and South America, and he is fluent in Chinese and Cantonese and working toward Spanish fluency.

He is a sought-after speaker for national and global trade and legal organizations, particularly on topics related to foreign direct investment between the U.S. and China, strategies like friendshoring or nearshoring as alternatives to the China market, and emerging technologies. Jonathan serves on the board of directors for World Trade Center Utah and dedicates time to mentoring entrepreneurs through various nonprofit organizations.

He is also recognized as a legal expert in the fast-moving and complex emerging technologies ecosystem, including business and regulatory issues surrounding artificial intelligence (AI) and various web3 components: decentralized autonomous organizations (DAOs), smart contracts, decentralized finance (DeFi), cryptocurrencies, coins, and tokens, including non-fungible tokens (NFTs). His blockchain experience encompasses collaborations with international DAO communities, NFT artists and studios, layer-2 blockchain developers, metaverse companies, and celebrity brand influencers. Jonathan also represents entrepreneurs who are developing tools and communities focused on AI applications to a range of businesses.

I. Understanding asset tokenization | 1:00pm – 1:30pm

• Asset tokenization
  • Definition and significance of asset tokenization
    1. Intangible vs tangible assets (Real World Assets (RWA))
  • Historical context and market growth
  • Key concepts: Fungible vs. non-fungible tokens (NFTs)
• Liquidity enhancement and transaction efficiency
• Democratization of access to investment opportunities
• Legal and operational challenges

II. The tokenization process and use cases | 1:30pm – 2:00pm

• The tokenization process
  • Steps involved in tokenizing an asset
  •  Types of tokens: Security tokens vs. utility tokens vs everything else
• Exploring use cases for tokenization
  • Tokenized stock: Investment contract or not
  • Tokenized treasuries: Advantages and disadvantages
  • Tokenized bonds: Market implications and challenges
  • Tokenized commodities: Accessibility and market volatility
  • Tokenized real estate: Fractional ownership and regulatory hurdles
  • Tokenized carbon credits: Market transparency and regulatory issues
  • Tokenized enthusiasm: Capitalizing on a celebrity’s fan base
  • Tokenization in art and collectibles: Opportunities and risks

Break | 2:00pm – 2:10pm

III. Legal frameworks and regulatory considerations | 2:10pm – 2:40pm

• Navigating legal frameworks in tokenization
  • Legal recognition of tokenized assets (securities vs currencies vs digital assets)
  • Ownership rights and transfer of tokenized assets
  • Addressing fractional ownership and consolidation of interests
• Regulatory and policy considerations
  • Current regulatory landscape and challenges
  • The role of global bodies (e.g., IOSCO) in standardization
  • Case studies: SEC v. Ripple Labs and implications for tokenized assets

IV. Standardization initiatives and future outlook | 2:40pm – 3:10pm

• Relevant standardization initiatives
  • ISDA Tokenized Collateral Model Provisions
  • UCC Article 12 amendments and their impact on digital assets
• Large-scale adoption of tokenization
  • Interoperability and integration into existing financial systems
  • Consumer protection measures and regulatory frameworks
  • Future trends and the evolving landscape of asset tokenization