Tokenization is the next big step in how financial assets are housed, and offers advantages over existing traditional structures, Wall Street firm Bank of America (BAC) said in a Friday report, noting that it also brings risks.

At its core, tokenization is the process of converting ownership of real-world assets, from stocks and bonds to real estate, private equity, and even art, into digital tokens recorded on a blockchain.

Tokenization follows a lineage that began with mutual funds and expanded through separately managed accounts, collective investment trusts, and exchange-traded funds (ETFs), and according to the bank's analysts, this model could reshape the way investors access and manage assets by offering a number of advantages over traditional structures.

Among the most important

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