Asia is currently navigating through economic fluctuations, with shifts in the global market presenting complex challenges for even the most robust economies. As the US dollar strengthened against Asian currencies, there are emerging concerns about capital movement, reduced exports, and potential currency devaluation in countries closely tied to the dollar.
Economic challenges are increasingly apparent, particularly in China, which has recently lost its position as ASEAN’s largest export market. Across Southeast Asia, the economic situation is marked by significant inflation spikes, with Laos experiencing rates as high as 31 per cent. Meanwhile, unemployment rates show notable variation across the region, from 1.10 per cent in Thailand to 4 per cent in the Philippines.
Despite these challenges, businesses and investors are exploring innovative strategies to stimulate economic activity. One promising approach is the adoption of Web3 technologies, particularly the tokenisation of Real-World Assets (RWAs), which could provide new avenues for growth and resilience in these turbulent times.
How tokenised RWAs can improve Asia’s economies
RWAs are tangible and intangible assets that exist in the real world and have unassailable value in real-world trade and commerce. These include real estate, infrastructure, financial contracts, and intellectual properties. They can be tokenised or converted to digital tokens on a blockchain, unlocking a new frontier for Asian economies.
This tokenisation is not a mere concept. Companies such as MakerDAO, Mantra, and Polymesh have been tokenising real-world assets and enabling users to invest, trade, and otherwise utilise these to keep track of data and ownership.
Currently, the estimated total value of the tokenised asset market is around US$116 billion. However, this value is projected to multiply, reaching $3 trillion to $10 trillion by 2030. Asia has an enormous expanse of assets that can be tokenised and used to help drive economies.
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Tokenised RWAs can help Asia navigate the ongoing Asian economic storm in several ways. They can help improve access to capital and enhance transparency and efficiency, which are crucial as economies make the most of their limited resources and unlock new investment opportunities.
RWAs on improving financial systems
As a capital access augmentation solution, tokenised RWAs help make traditionally illiquid assets easier to convert to cash or cash equivalents. Tokenisation enables the fragmentation of assets into smaller digitised units that are easier to trade. This process makes them more accessible to investors who have limited cash.
For example, owners of a large tract of land or a building can more easily convert their properties to cash by offering their tokenised assets to multiple investors around the globe instead of finding a single regional buyer to acquire the property. It creates democratisation for global investment opportunities, which is particularly advantageous for countries that large investors rarely consider.
Individual or small-scale investors can fund economic activity through tokenised assets that can be digitally transacted, and physical barriers can be removed.
On the other hand, RWAs empower transparency and efficiency in financial systems. They obtain a secure and tamper-proof digital ownership record, which is essential in building investor confidence amid economic uncertainties.
RWAs help investors avoid fraud found through traditional investment services while providing a way to streamline transactions. Also, efficiency and transparency benefits attract domestic investors and foreigners who previously hesitated to invest their money beyond territorial borders.
Lastly, RWAs help create new investment opportunities as they make it possible to offer investment schemes that were previously impossible because of the limitations of traditional finance. Through tokenised RWAs, anyone from around the world can, for instance, invest in a solar farm in China or an agricultural business venture in the Philippines.
To obtain funding, businesses looking for capital can offer their tokenised assets, new technology patents, or smart contracts for a guaranteed share of the net revenue facilitated by smart contracts.
According to global consultancy firm Roland Berger, “The tokenisation of real-world assets isn’t a thing of the future; it’s happening now. We estimate that the total market for tokenisation, by conservative estimates, will significantly exceed US$10 trillion by 2030. This is setting the stage for a financial ecosystem where digital tokens represent real-world assets, making them more accessible than ever before—not only to the privileged or institutional investors but to the public at large”
RWA tokenisation for economic empowerment
The concept of tokenised RWAs may sound intimidating to those with little knowledge about modern investment opportunities. However, it helps broaden investment opportunities even for those who do not consider themselves tech-savvy.
Tokenisation companies like Go! SmartChain AI emphasises user-friendliness, providing a simple and rapid way to tokenise assets with minimal technical requirements. Processes are made more accessible for businesses, asset issuers and investors to lessen the restrictive requirements and procedures associated with traditional financial transactions and investment products.
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Anthony Diaz, Founder and Chief Executive Officer of Go! SmartChain AI notes how tokenisation and blockchain technology provide better resource access. This new technology gives individuals representation and access to financial systems and investment opportunities, especially in developing economies.
“This approach democratises access, allowing for more inclusive participation and fostering economic empowerment by giving individuals in these communities a stake and a voice in ecosystems that were previously beyond their reach,” Diaz says.
Adding to their innovative approach, Go! SmartChain AI has developed an AI-driven RPG that gamifies social achievements, fitness goals, and wellness habits in nutrition. This platform allows children and adults to earn rewards while engaging in activities promoting economic empowerment and healthy living.
Understandably, many will continue to doubt the viability of RWAs. RWA tokenisation doubters may find it reassuring that tokenisation companies have already built an ecosystem that relies on the reliability and reputation of established tech players.
Go! SmartChain AI has partnered with Google Cloud to support enterprise and large-scale activities fueling the tokenisation of global assets. The platform also benefits from the NVIDIA Inception Program, which boosts its AI and data science capabilities, which are crucial for refining asset management and personalisation algorithms.
Users of Go! SmartChain AI will experience seamless payments and manage RWA assets securely through integration with Google Wallet, using an interface they are familiar with. Additionally, Go! SmartChain AI will incorporate Google Fit to use health data for personalised wellness tips, real-time fitness tracking, and rewards for achieving health goals, making health management both convenient and innovative.
Weathering the storm
Tokenised RWAs present a silver lining that provides challenged economies with new ways to navigate an economic storm. The democratisation of capital and the creation of new investment schemes enable the flow of funds from various sources to help struggling businesses and support innovative ventures.
Meanwhile, the advantages of transparency and efficiency also help build trust in investment opportunities. As tech-savvy Asia faces economic uncertainties, it makes sense to turn to new technology through RWA tokenisation.
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