Use Cases for Asset Tokenization BFC Practice Questions (Page 8)

Questions 36–40

1. 36application · medium

   A supply chain company wants to tokenize the provenance and ownership of a shipment of coffee beans from farm to roaster. Each batch is unique and must be tracked individually. Which token standard and approach is most appropriate?

   • AUse a fungible token standard like ERC-20, with each token representing one kilogram of coffee.
   • BUse a centralized database and only record the final sale on the blockchain.
   • CUse a payment token such as Bitcoin to represent the shipment's value.
   • DUse a non-fungible token (NFT) for each batch, recording custody and transfer events on the blockchain.
   Reveal Solution Discussion Select an answer first
2. 37expert · medium

   A real estate developer wants to tokenize a new residential building. The developer wants to raise funds from international investors while complying with local property ownership laws that restrict foreign ownership. Which approach is most likely to succeed?

   • ATokenize the building as a security token representing shares in a local holding company that owns the property.
   • BTokenize the property directly as a non-fungible token (NFT) and sell it to foreign investors.
   • CCreate a utility token that gives holders the right to use the building's amenities.
   • DIssue tokens that represent a share of the rental income without any ownership rights.
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4. 38expert · hard

   A financial institution is exploring tokenization of a diversified portfolio of assets, including real estate, commodities, and intellectual property. They want to create a single token that represents a share of the entire portfolio. Which consideration is most important?

   • AEnsuring that the token's legal structure clearly defines the rights to each underlying asset class.
   • BChoosing a token standard that supports the highest transaction throughput.
   • CGuaranteeing that the portfolio's value will increase over time.
   • DUsing a single custodian for all asset types to simplify operations.
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5. 39application · medium

   An investor is deciding between buying a tokenized gold product and a traditional gold ETF. Which difference is most likely to be true?

   • AThe ETF is always more expensive than the tokenized gold.
   • BThe ETF provides direct physical delivery of gold to the investor.
   • CThe tokenized gold is not subject to any custody or storage fees.
   • DThe tokenized gold may allow direct ownership of specific allocated bars, while the ETF represents a claim on a pool of gold.
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6. 40application · medium

   A fine art gallery wants to sell a $10 million painting to a global audience while retaining custody of the physical artwork. The gallery is concerned about the high fees and slow settlement of traditional art sales. Which tokenization benefit is most directly realized in this scenario?

   • AGuaranteed price appreciation because the token is backed by a physical asset.
   • BAutomatic physical delivery of the painting to each token holder.
   • CElimination of all regulatory requirements by moving the sale to a blockchain.
   • DIncreased liquidity through fractional ownership and secondary trading of the tokenized shares.
   Reveal Solution Discussion Select an answer first