Tokenization Continues To Revolutionize The World

The Boston Consulting Group predicts that the tokenization of tangible assets could emerge as a $16 trillion industry in the near future. However, its influence extends beyond mere financial statistics and can offer novel solutions to real-world challenges, particularly benefiting individuals in developing nations.

During a panel moderated by Kristina Lucrezia Cornèr at the Swiss Web3 Fest, numerous industry professionals provided insights into the practical application of tokenization to real world assets, showcasing its potential to enable unprecedented solutions.

Tokenization Could Be The Answer

Christoph Mussenbrock, representing the decentralized insurance protocol Etherisc, discussed how tokenization solutions can positively impact agricultural production. He highlighted that Kenyan farmers now receive prompt payouts, even if their yields fall short of expectations, in stark contrast to the traditional insurance sector, where waiting periods of up to six months prevail. Such delays can often significantly jeopardize the livelihoods of families.

According to Mussenbrock, traditional insurance companies are increasingly seeking on-chain solutions, marking a significant shift in the industry. He emphasized that this transition is already underway.

Stephan Rind, a member of the BrickMark Group, similarly highlighted how asset tokenization can grant access to financial products that are currently inaccessible to the majority, thus contributing to bridging wealth disparities. Rind stressed the potential for financial inclusion, democratization of capital, and the tokenization of a wide array of assets in various categories, be it real estate or livestock.

A Bright Future

Carlos Mazzi, representing Finka, recounted the experience of tokenizing La Pradera, a 3,000 hectare cattle ranch in Bolivia housing over 3,500 cows. They tokenized the value creation process, converting grass into protein and eventually cash. Mazzi acknowledged the challenges in achieving this, including financial engineering and legal frameworks. However, he noted that market adoption has been slower than expected, attributing it to systemic issues.

Moreover, Rind expressed confidence that central bank digital currencies (CBDCs) will surpass adoption hurdles. He believes CBDCs will provide wallets to billions worldwide, and regulatory changes will facilitate more capital flowing into asset tokenization.

Jose Fernandez, representing Tokengate, also shared an optimistic perspective, predicting that within a decade, most individuals will engage with tokens daily, whether they are consciously aware of it or not. In any case, the world is certainly changing and tokenization will play a huge part in that paradigm shift going forward.