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Tokenization System

A unified industrial-level system for asset digitalization, which provides a standardized mechanism for digitizing any asset classes and objects of property rights, creating a transparent and secure circulation of tokenized assets per legal requirements.

TKEY Tokenization System

How does it work?

Tokenized assets (credit) are digitized assets on the TkeyNet network backed by underlying assets and their current value. The objects of tokenization can be: securities, company shares, commodities, fiat or digital currencies, real estate, intellectual property, art, physical goods, and any other objects; assets on the TkeyNet are credit forms and IOUs.


TKEY

In the ledger, money or other assets are recording as a loan issued by market participants. An Operator (market participant) can be a bank, financial institution, or another enterprise that provides tokenized assets on the TkeyNet network corresponding to the number of underlying assets of the network.


The loan is providing to a digital account in exchange for a deposit; credit can send and received between people or companies on the network. Proof of ownership of the asset’s nominal value using a ledger entry (credit) carries, which can repay from the Operator at any time.

Storing money or assets in an ecosystem means storing a loan from a specific Operator, for example, from Bank of Dubai; when the client provides the Bank with a ledger entry, the Bank will exchange it one-to-one for fiat currency and deposit the money into a traditional bank account outside the ecosystem; thus participants can use tokenized assets to track, store and transfer any asset: dirham, dollar, stock, gold, and other material value.

Non-cash money tokenization process


Usecase No. 1

The depositor instructs the Operator to deposit a real asset to the digital infrastructure immobilization account, the system algorithms instruct the creation of digital asset units in the system and credit them to the depositor, the ledger records the amounts of debts on assets and ownership rights reflected in the form of digital obligations corresponding to the amount of a real asset.

ParticipantBank AccountTkeyNet Account
Operator+1,000 AED−1,000 AED
Depositor−1,000 AED+1,000 AED

Usecase No. 2

The Operator instructs the transfer of tangible assets to the immobilization account, using the TKEY Connect software, which instructs to create digital units in the TkeyNet system to their digital account in the network.

Bank accountTkeyNet account
1,000 AED (immobilization)+1,000 AED

Tokenization capabilities

Licensed financial institutions, exchanges, or industrial organizations can issue, transfer, exchange, and burn loans between market participants.

Participant of the system can exchange a loan from any Operator for a loan from another Operator through the exchange infrastructure; the confirmation of the transaction will be a ledger entry in the distributed ledger; when an asset is selling through an ecosystem, a loan is transferring to the buyer, which can then repay a loan through the Operator (financial institution) to take possession of the actual asset.

The system’s mechanisms provide participants with uninterrupted operation of the matching engine without the cost of intermediaries, and the transfer of assets or rights from one owner to another is carried out directly between the parties in an automatic mode.


Example No. 1

You contact the Operator, for example, the Bank of Dubai. Bank of Dubai promises to send your funds to the Bank of Pakistan in 10 seconds. You don’t need to know if the Bank of Dubai is using TKEY technology or not; you deposit to the Bank of Dubai and provide the recipient’s bank account details. The Bank of Dubai uses software to immobilize the deposit and tokenize it one-to-one on the TkeyNet network.

Bank of Dubai instructs the credit transfer to the Bank of Pakistan; the exchange architecture automatically exchanges a loan in dirhams for a Pakistani rupee loan. The Bank of Pakistan, having received a loan, exchanges it for a one-to-one deposit and credits the funds to the recipient’s bank account, so your family in Pakistan receives the necessary funds to the bank account instantly.

ParticipantBank accountTkeyNet account
Bank of Dubai+1,000 AED−1,000 AED
Market Maker0+1,000 AED; −45,679.90 PKR
Bank of Pakistan−45,679.90 PKR+45,679.90 PKR

Benefits of the tokenization system

An automated asset digitization engine with a rigorous set of standards and regulations provides participants with a solid foundation for creating a supportive digital marketplace with the ability to interact with financial and industrial systems infrastructures using flexible APIs that meet market demands for interoperability, scalability, security, reliability, confidentiality, and management of the institutional level.

The digital environment creates a favorable socio-economic climate for interested industrial and institutional players, which opens up new opportunities for liquidity management, reduces entry barriers and market fragmentation, increases the efficiency of business processes, facilitates fast daily settlements with low cost, and allows participants to diversify their investment portfolio due to direct access to transparent infrastructure. The system allows you to automate an enterprise’s business processes, reduce operating costs, and reduce risk levels for investors and consumers.

The infrastructure provides an opportunity for asset splits, the process of which simplifies trading in secondary markets, reduces entry barriers, market fragmentation, and eliminates the risks of miscalculation.


Flexible parameter setting

TKEY

The protocol implements business logic depending on the tasks of the enterprise, the characteristics of the transaction, and other parameters, which allows organizations to manage configuration parameters easily: set up the escrow, control the execution of transactions, introduce necessary restrictions on demand, issue dividends, conducting voting, and more.


Accreditation

TKEY

The tokenization system allows organizations to establish strict rules for authorizing asset ownership per the AML/KYC/CFT/OFAC policy requirements for individuals and legal entities.


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