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What Specific Type of Financial Derivative Benefits Most from Blockchain-Based Tokenization?

Illiquid OTC derivatives are standardized, made divisible, and easier to transfer through tokenization, boosting liquidity.
Greeks.Live08.11.25

What Specific Type of Financial Derivative Benefits Most from Blockchain-Based Tokenization?

Illiquid or bespoke Over-The-Counter (OTC) derivatives, such as complex interest rate swaps or credit default swaps, benefit most. Tokenization converts the contractual rights and obligations of the derivative into a digital asset on the blockchain.

This process standardizes the derivative, making it divisible, easier to transfer, and thus more liquid. The token represents the ownership and can be managed by smart contracts, automating payments and collateral.

How Does Tokenization Affect the Liquidity of Traditionally Illiquid Assets?
How Does the Legal Concept of Ownership Transfer Apply to a Tokenized Asset?
How Does a Margin Requirement Differ between OTC and Listed Futures Contracts?
What Is the Difference between a Cleared and an Over-the-Counter (OTC) Derivative?

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