The Boston Consulting Group estimates that tokenization of real-world assets could become a $16 trillion industry in the coming years. But its impact goes far beyond financial numbers and can help people in developing countries find new ways to address real-world problems.
During a panel at the Swiss Web3 Fest moderated by Cointelegraph Editor-in-Chief Kristina Lucrezia Cornèr, industry experts shared insights into how tokenization can be applied to real-world assets and how it enables unprecedented solutions.
“Our farmers in Kenya receive their payouts days after the end of the harvest season. If you have less income than expected, you will receive an immediate payout. In traditional insurance, they have to wait six months. And that can mean that…” “The end of a family business,” explained Christoph Mussenbrock from the decentralized insurance protocol Etherisc about tokenization solutions for agricultural production.
Meet our speakers for the Real World Assets panel:
@KristinaLCorner – Cointelegraph
Jose Fernandez -@TheTokengate
@liesdorn -@etherisc
@CFernandezMazzi – #Finka
Stephan Rind – BRICKMARK
FIVE Zurich
https://t.co/F0jSQL2uvl@CryptoOasisUAE @dfinity pic.twitter.com/jbZaSKg5pZ
— WEB3FEST (@web3fest_int) September 16, 2023
According to Mussenbrock, there is increasing demand from traditional insurance companies for on-chain solutions. “This is currently happening as we speak. This is a big change. We’re seeing traditional insurance companies kind of wading into this situation.”
BrickMark Group’s Stephan Rind noted that asset tokenization can provide access to financial products that are currently unavailable to most people, helping to close a gap in wealth distribution.
“Number one in financial inclusion: Of course there can be a range of participants who can participate in a financial instrument, and there is the democratization of capital.” […] “Everything from real estate to animals to all the things that you can have in traditional finance that could actually be tokenized and represented in a digital financial instrument,” Rind commented.
Carlos Mazzi from Finka shared his experience tokenizing La Pradera, a cattle farm in Bolivia with 3,000 hectares of grassland and over 3,500 cows. “We symbolize the value creation of what we call from grass to cash. It is the tokenization of value creation. The conversion of grass into protein and into cash by a great machine given by nature that is a cow. We were early pioneers and that was very challenging […] It required a lot of financial engineering, legal frameworks, etc. to create a revenue token. So it was fantastic […] The only thing that hasn’t developed as we expected is market acceptance, and it’s a systemic issue that will hopefully be fixed at some point.”
Tokenized Ranch La Pradera in Bolivia. Source: Finka GmbH
Rind believes that the issue of adopting central bank digital currencies (CBDCs) is becoming obsolete. “It will create billions of people in the world with wallets,” he noted, adding that regulation will also free up more capital for asset tokenization.
“We believe that in 10 years, most people will be interacting with tokens on a daily basis, whether they know it or not,” added Jose Fernandez of Tokengate.
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