In an interesting development for the world of tokenization and how it relates to legacy
asset classes, the Spanish banking giant Santander has partnered with Argentina's AgroToken to
offer loans backed by tokenized commodities like corn and soy.
So could this be another sign of maturity for tokenization?
And who better to ask than someone with a passion for tokenization?
And that's Henry Chong, CEO of Fusang.
Fusang aims to reshape investment markets with blockchain technology.
And of course, tokenization is right up there, Henry.
Absolutely.
You know, always great to be here.
And so this is a really cool idea of unlocking value in farms.
And if you think way back to even the birth of financial markets, what was Wall Street
except to find a marketplace for farmers to interact with each other for future buyers
and the yield, the harvest that they have.
Now, we fast forward to the 21st century.
What do you think of this idea?
How could it change the commodities market as we know it today?
It's great that you bring up commodities markets because as you said, the initial idea behind
things like commodity futures is so that farmers can go out and hedge their risk.
It's meant to be around making physical supply chains more efficient, not just about financial
speculation.
And unfortunately, that's obviously a large part of what Wall Street does today.
And as I mentioned, it's very exciting to see some banks starting to move back to the
roots, almost of saying capital markets in their original conception is there to allocate
capital to interesting ideas and projects - that's capitalism.
And unfortunately, I think there are too many people, banks included, who are still focused
just on rent seeking behavior and making money by being an intermediary and playing that
role as a gatekeeper.
I want to talk about these Agrotokens a little bit more and these Santander loans could,
of course, allow farmers to unlock their business potential.
But let's take a look at how startup companies could also use tokenization to unlock their
potential.
Are the barriers for entry coming down across the board here?
I don't think that tokens can or indeed even should be seen as an exit opportunity or quite
frankly, as a get rich quick scheme.
Tokenization is just another technology layer to, as I said, make capital markets more efficient,
which in its original and conception is about saying, I'm a company, I've got an interesting
idea or a project.
I need capital to help fund my company so I can actually build a real business.
And this is as true for startups as it is for farmers.
Same question as you said, with Agrotokens, farmers say, I need capital, I want to focus
on running my business.
Is there a more efficient way that I can go out and raise capital?
And especially if I can start to do this from people who are stakeholders of my own company?
Right.
Every farm has its own supply chain.
If I can just figure out how I can turn some of these stakeholders into shareholders, I
think then we will finally get a little closer to that original promise of capitalism.
Yeah, absolutely.
Speaking of legacy assets moving into the tokenized world, and I know that you're pioneering
so many of of that movement.
How about art here?
There's undoubtedly a lot of buzz about the NFT space.
There's also been a lot of criticism over plagiarism, theft and what buyers are really
getting for their money.
What is that telling us about the need for an underlying asset to a token where unlocking
value is concerned?
Just like how something like a security token is just a technology layer, and we always
need to dig one step deeper and say, what exactly does this token represent as an asset?
NFTs are no different.
We've got fungible tokens.
We'll have non-fungible tokens.
And the question is, do these tokens give you either, number one, legal or contractual
rights to some kind of underlying asset?
Now, that asset, it could be physical lot.
It could, quite frankly, be digital art.
But again, making sure that the token actually gives you some kind of right, a copyright
or ownership even of a piece of digital art, or it could have utility value.
And I think both of those two things, either real ownership or utility, are very exciting
in the NFT space.
And to me, that's really where NFTs need to progress to what I call NFT 2.0, where they
start to be linked to real assets.
And right now the honest truth is that most NFTs don't work that way.
It's a massive, massive problem.
Again, no different than what we're trying to say in the security token space, which
is the technology is very exciting.
But make sure that your tokens represent something real.
Something real, something tangible.
It is tokenizing the world, after all.
Henry Chong, always a pleasure.
Thank you.