At one of my previous employers, a project called “Tokenization” was in the pipeline. As a project manager, I knew it was crucial to understand the project’s objective and envision its final shape.

One day, my line manager approached me. “Mohammed, we need to meet in the meeting room today around 2 PM,” he said. “Sure, I will be there,” I replied, surprised that he hadn’t mentioned the agenda.

In the meeting, he said, “I can see that you lack the technical understanding of the project, and you need to improve in that area.”

“Could you elaborate on the technical details of the project?” I asked, hoping for a constructive conversation.

“How would you want me to gain this technical understanding, and who is the right person to support me? Do you think you are the right person to help?” I pressed further. Unfortunately, my questions went unanswered.

As a project leader, it is needed to understand not just the technical aspects, but also the business and profitability of the project. What value would it add to the organization and the consumers? This curiosity led me to dive deep into research, uncovering the economic value of tokenization.

In this article, I focus on the “Digital Economy” and its impact on businesses and organizations. Is it about making more money and wealth? Is it about transformation? Is it a new trend in society? Is it about providing new facilities and security for consumers?

Rereading and researching helped me identify that the digital economy represents a new economic paradigm centered on digital knowledge and information, driven by digital technology and facilitated by information networks. It integrates digital technology with the real economy, leading to increased digitization, connectivity, and intelligence in society.

The concept of the digital economy was initially introduced by Don Tapscott in 1996. Manuel Castells, in his book “The Rise of the Network Society,” explores how information technologies have transformed economic activities.

He introduces the concept of the “network society,” where the economy is increasingly organized around networks rather than hierarchical structures.

This theory emphasizes the importance of information flows, digital networks, and the global interconnectedness of economic activities.

Rachel Botsman and Roo Rogers, in their book “What’s Mine Is Yours,” discuss how collaborative consumption is changing the way we live and explore the rise of the sharing economy. This theory examines how digital platforms enable individuals to share access to goods and services, fostering new forms of economic transactions and community interactions.

So, what is tokenization, and why is it significant in the digital economy? Tokenization is a transformative force, offering unprecedented opportunities to enhance liquidity, democratize access to investments, and improve efficiency and transparency.

One of the most significant advantages of tokenization that was found is the enhancement of asset liquidity. Traditional assets like real estate or fine art often suffer from illiquidity, making it challenging to buy or sell them quickly. By tokenizing these assets, owners can sell fractions of them, facilitating easier and faster transactions.

At last, I can say that tokenization is a vital component of the digital economy, providing innovative solutions to age-old challenges. It enhances liquidity, democratizes investments, and fosters efficiency and transparency. Understanding its potential and applications can unlock new value and drive the digital economy forward.

About the Author : Mohammed Anwar Al Balushi, Academic Lecturer and Advisor, Oman College of Management and Technology