July 25, 2023
I would like to tell you about asset-backed tokens coming into prominence in 2023. Backed-asset tokens are not much of an issue in the present, we always talk about Bitcoin and Altcoin, but the market of the tokens I explain below will grow at a dazzling speed and reach a volume of trillion US$ in two or three years.
The idea of tokenizing assets could become quite popular, as tokenization offers many more benefits to asset owners. Owners can keep some or all of those tokens in their blockchain wallets, sell them or trade them for another asset or token whenever they want, and perform all these transactions outside banks and conventional centralized exchanges.
According to an article I read, these tokens are expected to rise to a volume of € 916 billion just in Europe (Source 1). Furthermore, Blockchain Council’s website informs that this category was US$ 2.3 billion in 2021 and is expected to rise to US$ 5.6 billion in 2026 (Source 2). The difference between these two estimations is huge, and the former is closer to my projections, because it covers the stablecoins including Tether. If I am right about the developments I think will happen, this category’s value will skyrocket and reach multiple trillions of US$. Before explaining the reason of such increase, let me explain what is an asset-backed token and what categories are they available in.
In general, digital assets are divided into three categories: crypto currencies reaching a total volume of US$ 1.2 trillion as of July 2023 according to the Coinmarketcap website; and asset-backed tokens in a different category.
Please view the graphic given below:
Assets to be tokenized in the next 2-3 years:a. Financial assets such as bonds, bills and sukuk,b. Real estate, i.e. physical assets such as land, apartments, buildings,c. Metal assets and jewellery such as gold, silver, platinum, etc.,d. Underground resources such as natural gas, oil, coal,e. Power plants where we produce energy such as HEPP, SPP and their output,f. Agricultural assets such as wheat, barley, corn and hazelnuts,g. Agricultural products that should be consumed in a short time, such as fresh fruits and vegetables,h. Artistic assets, whether physical or digital.Now, in the RWA hype these days, the companies that BUIDL and BlackRock invest in are infrastructure companies that are used to tokenize RWAs with financial instruments called "money market tools". BlackRock has not yet been interested in the tokenization of a physical asset. All the storms that are brewing are for the digital currency market tools. Oh, are they insignificant, no, I'm not saying that. However, the tokenization of tangible physical assets, especially agricultural commodities, oil and precious stones, and commercial commodities, is truly revolutionary. BlackRock hasn't attempted that revolution yet.
WechselNow I'm going to tell you about a very important mechanism called Wechsel. This term means to change in German, a banking term used to exchange money from one unit to another. However, there is another mechanism that is referred to by this term: This mechanism, which is very similar to our post-dated checks, has appeared in various countries from time to time in the last century.For example, when the Soviet Union collapsed in 1991, the economy suddenly became inoperable due to the sudden depreciation of the rubles. At that moment, as an alternative solution, giant companies such as Gasprom and Lukoil produce forward bonds indexed to gasoline and diesel, fuels that provide energy. These are called Wechsel in Russia. Like our post-dated cheques, these Wechsels are used as banknotes in the market by circulating their backs as they change hands, that is, by assigning them repeatedly.If you pay attention, these Wechsels are actually notes indexed to RWAs, that is, real commodities such as oil and gas, on paper, and they were used as money. Now, if we look at today, there are sanctioned countries in the world that cannot use dollars or euros in commercial activities, and African countries that are not sanctioned but whose national currencies are printed by the central bank of France and are subject to a kind of colonial system. Nor may these countries have a giant commodity corporation to produce Wechsels to turn to when they have no paper money to rely on. For example, these African countries can use wheat-pegged tokens as their national currency.This possibility, which may seem like a herpes when you first hear it, will become a reality in the future. As Cropto, we have demonstrated the technology and procedures for the production of tokens pegged to grains such as wheat, barley and corn, a kind of temporary law in practice so far. Don't be surprised if one day an African country rejects the mold set for it by its former colonizer, France, and thinks of using Cropto Tokens as its country's national currency. After all, a kg in return. A token with wheat can be easily used as a means of payment in buying and selling from mobile phones. Imagine if the prices of goods within the country were suddenly expressed in one of the Cropto Agriculture Tokens, for example, the Cropto Wheat Token (Short Code: CROW)! That's when an event will happen that will make even the giant fund BlackRock drop to the floor. Then the whole world will really understand how RWAs, tokens equivalent to real agricultural products, can lead to a revolutionary change.
As Cropto, we set out with two main goals for our country and the world's humanity, the first is to pave the way for even the normal citizen on the street in our country and in any part of the world to invest in agricultural products easily and quickly 24/7 in the amount they want, and thus to ensure that the prices of local and global agricultural products are more democratic and participatory; secondly, the use of Cropto Agricultural Tokens (Cropto Wheat, Barley, Corn, Hazelnut and other Cropto Tokens) as a global currency (Cropto = Global Agriculture Currency) in the global trade, export and import of agricultural products between countries. On the other hand, if we consider that the prices of agricultural products generally increase in the range of 25-100% on an annual basis, we cannot generally talk about a bear market for agricultural products, that is, a market where prices decline on an annual basis, so with Cropto Agricultural Tokens, investors can easily allocate some of their investment baskets to agricultural products that increase on an annual basis.
Cemil Şinasi Türün
Chairman of Advisory Board
Cropto