DEMATERIALIZATION Meaning and
Definition
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Dematerialization refers to the process of transforming physical objects or materials into intangible or digital forms. It is the concept of reducing or eliminating the need for physical assets, such as paper documents, tangible goods, or traditional currencies, by converting them into electronic or virtual representations.
In the context of finance and economics, dematerialization typically relates to the conversion of physical securities, such as stock certificates or bond papers, into electronic or digital form, known as dematerialized or electronic securities. Dematerialization in this sense allows for more efficient and convenient trading, settlement, and transfer of ownership, as it eliminates the need for physical delivery or manual processing.
In a broader perspective, dematerialization can also refer to the reduction of physical waste and environmental impact by shifting to digital alternatives. It encompasses the substitution of physical objects with virtual equivalents, such as digital books replacing printed books, online banking replacing physical branches, or cloud storage replacing physical file cabinets.
Dematerialization is often driven by technological advancements, such as the internet, digitalization, and blockchain technology, which provide the infrastructure and platforms for the virtualization of assets and activities. This trend towards dematerialization has been widely adopted across various industries and sectors, promoting efficiency, cost-effectiveness, and environmental sustainability.
Common Misspellings for DEMATERIALIZATION
Etymology of DEMATERIALIZATION
The term "dematerialization" is a compound word that combines the prefix "de-" which denotes negation or reversal, and the word "materialization". "Materialization" is derived from the Latin word "materia", meaning "matter" or "substance". The suffix "-ization" is added to indicate the process or act of making something. Therefore, "dematerialization" can be understood as the process of removing or negating the material aspect of something, often referring to the conversion of physical objects or resources into digital or immaterial forms.
