The Boston Consulting Group estimates that the tokenization of real-world assets could become a $16 trillion industry in the coming years. However, its impact goes far beyond financial numbers, helping people in developing countries find new ways to solve real-world problems.
In a panel discussion at Swiss Web3 Fest moderated by Kristina Lucrezia Cornèr, Editor-in-Chief of Cointelegraph, industry experts provided insights into how tokenization can be applied to real-world assets and enable unprecedented solutions.
“Our farmers in Kenya receive payments a few days after the harvest season ends. If their yields are lower than expected, then they receive payments immediately. In traditional insurance, they would have to wait six months. This could mean Christoph Mussenbrock, author of the decentralized insurance protocol Etherisc, explains when talking about tokenized solutions for agricultural production.
Meet the speakers from our Real World Assets group:
@ChristinaLcorner – Union Telegraph
Jose Fernandez –@TheTokengate
@liesdorn –@etherisc
@CFernandezMazzi – #finca
Stephen Lind-BRICKMARK5 Zurich
https://t.co/F0jSQL2uvl@CryptoOasisUAE @dfinity pic.twitter.com/jbZaSKg5pZ— WEB3FEST (@web3fest_int) September 16, 2023
Mussenbrock said there is increasing demand for on-chain solutions from traditional insurance companies. “This is happening as we speak. It’s a huge change. We’re seeing traditional insurance companies getting involved in this space in some way.”
Stephan Rind of BrickMark Group pointed out that asset tokenization can help reduce the gap in wealth distribution by giving most people access to financial products that are currently unavailable.
“Financial inclusion number one, obviously you can have many players who can participate in financial instruments and you can democratize capital […] Virtually everything from real estate to animals to what can be owned in traditional finance can be tokenized and represented in digital financial instruments,” commented Rind.
Carlos Mazzi from Finka shared his experience in tokenizing La Pradera, a Bolivian ranch with 3,000 hectares of grassland and more than 3,500 cows. “We tokenize what we call grass-to-cash value creation. It’s the tokenization of value creation. Converting grass into protein and then into cash via a great natural endowment machine (cows). We are Early pioneers, it was very challenging […] It represents a lot of financial engineering, legal framework, etc. to create income tokens.so this is awesome […] The only thing that hasn’t gone the way we expected is market adoption, which is a systemic issue that we hope will eventually be corrected. “
Rind believes that central bank digital currencies (CBDCs) will replace the adoption issue. “This will allow billions of people around the world to have wallets,” he noted, adding that regulation would also free up more capital into tokenizing assets.
Tokengate’s Jose Fernandez added: “We believe that ten years from now, most people will be interacting with tokens on a daily basis, whether they know it or not.”
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