LeapRate Exclusive… Tokenization on Blockchain has been a steady trend throughout 2018. It seems that everything is being tokenized on Blockchain from paintings, diamonds and company stocks to real estate.
Former MD of Morgan Stanley Patrick Springer recently joined LeapRate to talk about asset tokenization and explained why rebalancing your asset allocation might be the next best move.
The art of tokenized assets is second to none, as it begins to gain traction and popularity in many countries. Announced recently, four banks in the Islamic Republic of Iran have developed a gold-backed cryptocurrency. Not the first to do so, Korea, Macau and Venezuela have made waves by launching state-issued gold-backed crypto.
As we witness these progress and developments in the gold market with more jurisdictions in support of tokenized assets, what will happen to the gold and crypto ecosystem, and how will this affect investors and their sentiments? Shaun Djie, Co-founder of Digix, joins LeapRate today to explain this for us.
LR: Hi, Shaun, thanks for joining us today. What do you think will happen to the gold and crypto ecosystem this year?
Shaun: Often considered a safe haven, gold is likely to trend upward amidst growing economic uncertainty. With trade war tensions rising between the United States and China, investors tend to lean towards investments which are risk-averse to encourage a more stable portfolio.
Meanwhile, cryptocurrencies will have a slightly muted 2019 with little to no new interest coming from the more mature markets like the Americas and Asia-Pacific. Instead of relying on institutional interests which are insufficient in driving market demand or speculative interests in this specific asset class, the adoption rates will improve through new developing protocols.
LR: How will this affect investors and their sentiments?
Shaun: Investors are likely to remain bearish amidst the uncertainties, however, as investors see the need to forecast and evaluate financial risks to minimise the impact, there will be an increasing demand for risk management.
LR: What will the impact to investors and would-be investors be worldwide?
Shaun: With an apparent number of portfolio hits, well-hedged investors will actively look for opportunities to enter and exit the markets. For would-be investors, they will definitely exercise caution and carry out in-depth research before entering the financial market.
LR: There is a renewed interest in gold over less stable tradition investment vehicles, including fiat currencies – which are often affected by geopolitical and trade affairs. Why do you think it is happening now?
Shaun: Regardless of jurisdiction risks or political tensions, gold is still considered a “recession-proof” asset. Unlike fiat currencies and the associated fiscal and economic policies tied to it, gold is a universal store of value and a “speculative” asset class in times of uncertainty. Increased investments in gold in 2019 is likely, as more investors contemplate the viability of capital markets.
LR: What do you think of the token ecosystem as a whole and its potential in 2019?
Shaun: The token economy is almost utility-less at this point. The potential is very much inherent and hinged on the protocols’ and projects’ ability to deliver adoption strategies, go-to-market marketing, and value proposition that can solve a real problem, in turn enabling the ecosystem to thrive.
LR: Do the countries implementing tokenised assets bring benefits for investors?
Shaun: Absolutely as there is now a new and democratic way to purchase these assets, opening up the possibility that more individuals can micro-accumulate gold. In this sense, ownership has been reinvented with a new wave of tokenised assets.
Shaun Djie is the Co-founder of Digix, the tokenisation company behind the world’s first gold-backed digital asset class. Through the launch of its physical gold token, DGX, the company democratizes access to gold for the average person, providing opportunities for the use of digital gold through its operationally secure and transparent methods. Shaun is also the founder of the Ethereum Singapore meetup group, one of the largest Ethereum meetups in the world. Shaun advises multiple key projects on Ethereum and is also a Technical Committee Board Member at the IT Standards Committee, organised by IMDA and Enterprise Singapore for Blockchain and Distributed Ledger Technologies, ISO/TC 307. Shaun is a Regional Partner at Kenetic Capital.