Digital assets firm Galaxy Digital has provided a multimillion-dollar loan to Yat Siu, the co-founder of Animoca Brands, using a unique collateral combination of a tokenized 1708 Stradivarius violin and its tokenized counterpart in the form of a non-fungible token (NFT).
The violin has been valued at over US$9 million. It has a rich history including previous ownership by Russian Empress Catherine the Great.
The deal may potentially set a precedent for the tokenization of physical assets, which may transform the landscape of collateralization and open up new avenues for investment in high-value items.
Galaxy Digital’s move to tokenize the Stradivarius violin, a masterpiece crafted by the renowned Stradivari family, represents a fusion of the art world with blockchain technology.
The physical violin will be stored in Hong Kong under stringent security measures, ensuring its safety while its digital counterpart facilitates the loan process.
The process of tokenization involves converting a tangible asset into a digital token that can be traded on blockchain platforms, thereby offering a novel approach to asset management.
Several asset managers have shared bullish predictions for tokenization.
In a report late last year, 21.co predicted tokenization to scale to a US$3.5 trillion market in a bear-case scenario, or up to US$10 trillion in a bull case.