Tokenized Investment Funds and the Future of Asset Management: Challenges in Governance, Custody, and Compliance
DOI:
https://doi.org/10.63282/3050-9416.IJAIBDCMS-V5I3P111Keywords:
Tokenized Investment Funds, Blockchain, Asset Management, Governance, Digital Custody, Smart Contracts, Central Bank Digital Currencies (CBDCs)Abstract
Tokenized investment funds are a breakthrough in asset management, using blockchain to transform owning funds and simplify investments. Traditional funds that create digital tokens allow investors to trade more easily, hold a smaller number of shares and be more transparent, which helps people from all walks of life access more types of investments. Nonetheless, adding tokenization to blockchain technology creates major obstacles, especially in terms of governance, custody, and following regulations. It is important for governance models to stay flexible while connecting on-chain systems to rules made outside the blockchain, as fund managers must meet their changing fiduciary duties in decentralized settings. The need for safe and effective tools to control digital assets is very high, so key managers need to be qualified and use solid key practices. Several parts of the regulatory process are unclear and still divided, causing more challenges for KYC, AML rules and global operations. Despite the issues, tokenized funds provide several clear advantages, including saving costs, simplifying operations, and letting organizers create innovative ways to set up these funds. In this paper, we review many different aspects of tokenized investment funds and look at the present-day obstacles to their adoption and the directions in which they may evolve. It demonstrates why new standards, technologies and unified regulatory systems are required for the ecosystem to be secure and effective. As digital changes affect asset management, tokenized investment funds are set to transform the industry by making investments more open, transparent and reliable
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