A couple of big issues stand in the way of real-world asset tokenization, according to the chief executive of the global investment management giant VanEck.

In a new interview with Raoul Pal, VanEck CEO Jan van Eck says that liquidity is a “big issue” for tokenization.

“Who provides the liquidity? Anyone can theoretically tokenize anything. But if there’s a buyer and a seller of an asset, someone’s got to make that market.

And you think, ‘Oh, Jan, S&P 500 – it’s so obvious. So easy to price.’ But someone has to make a market in it, and someone’s got to make money making a market in it, so it’s not just that [someone] can create a tokenized real-world asset of anything, it’s who’s providing the market structure around the liquidity.”

Van Eck says the second big issue with real-world tokenization is figuring out where to make a market without a “regulatory headache.”

“In the world today, you’re not doing that in the United States. That’s fine. My bet is on Europe just because it’s got a large retail market as well as having a regulatory structure that enables crypto investing and trading.”

Van Eck is one of 11 firms that received approval from the U.S. Securities and Exchange Commission (SEC) to launch a spot Bitcoin (BTC) exchange-traded fund earlier this month.

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