Photo by Shubham Dhage on Unsplash
Tokenisation - the process of representing something as a digital token – is emerging as a powerful tool. It converts traditional assets into digital tokens on a blockchain network and has a wide range of applications across various fields, from security and asset management to global trade and real estate. By digitising assets and processes, stakeholders in the public and private sectors can use tokenisation to promote economic growth and innovation and encourage financial inclusion and transparency.
One of the major challenges facing developing countries is financial exclusion. An inability to access formal financial services limits their ability to participate in the economy. Remittance services offer a way for unbanked populations to send and receive money. Tokenisation can reduce the cost and time it takes to send remittances, andand can enhance remittances through the integration of digital wallets. Incorporating tokenisation in the remittance systems will streamline its processes while maintaining confidentiality. Additionally, by securing sensitive information and enhancing security measures, tokenisation can foster a more secure and efficient remittance system, a key concern in global money transfers. Tokenisation can help address this issue by providing a more inclusive and accessible financial system.
There is a range of applications for tokenisation, improving transparency and efficiency in various sectors. Tokenised supply chains can enhance traceability, reduce fraud, and improve overall efficiency. There are already real-life applications of tokenisation in food supply chains to improve connectivity between farmers and customers and enhance transparency at each stage of the chain. Tokenisation has also been posited as a solution for narrowing the global trade finance gap. The global tokenised assets market is expected to rise to $5 billion, with demand for these assets expected to rise in coming years. Standard Chartered believes that trade finance assets will create a new market that will bridge the existing $2.5 trillion global trade gap.
Tokenisation has the potential to be a powerful catalyst for economic growth in developing countries. By enhancing financial inclusion, improving transparency, and fostering innovation, tokenisation can help create a more equitable and prosperous world. As the technology behind tokenisation continues to evolve, it is essential for policymakers and businesses to embrace tokenisation and explore its potential to address the challenges facing developing nations.
Comments