Asset Backed Securities, ABS for short, were responsible for the financial crisis. As early as the beginning of 2000, American banks began bundling real estate-backed bonds with high probability of default with other bonds and bundling them into intransparent packages. The result is well known. Well, in 2019, the first ABS will start on a token basis. Will there be a bursting of a mortgage bubble this time as well?
Just like the few of us today still buy a CD, but download the music in a purely digital form as an MP3 file or listen directly to Spotify, also changes the medium of securities. Physical documents become digital tokens, ergo security tokens. Accordingly, each security that is currently held in the form of a deed at central securities depositories will in future be kept in custody via a blockchain. The more efficient medium to securitise and exchange property replaces a less efficient medium.