Agribusiness: tokenizing is an advantage that attracts investments!

Por Cassio J. Krupinsk
Em 28/07/2022

Brazilian agribusiness has a 27% share in the national GDP and is one of the largest exporters of products, leading to direct negotiations with the most different countries, where there are different visions, policies, economies, and social frameworks. The use of a coin, be it developed for the regional market or already recognized worldwide, could further expand the business of this sector, being able to work simultaneously with official currencies, placing the option at the choice of the foreign importer. Cryptocurrencies are a trend that Brazil’s agribusiness sector will need to deal with in the coming years. There are several types of commodities that can be tied to the different types of commodities: Agricultural, Energy, Mineral, and Financial. For these reasons asset tokenization for agribusiness brings advantages that can be attractive for an investment; Below are eight advantages of why to invest in tokenization in agribusiness.

1 – BALLAST IN REAL ASSETS

The token in the Agro segment is based on a real economic asset that has a known and easily verifiable market price and is usually already hegde in dollars. They can be structured with CPR, CRA, CR, and also on the issuer’s own assets, such as bags of products, cattle or similar;

2 – LESS COSTS

Reduction of indirect costs with bureaucracy (notaries, registries, registrations, etc.) and intermediaries (lawyers, brokers, trading, financial institutions, etc.) because the intelligent contracts make the whole investment process faster and safer;

3 – GREATER AGILITY AND TRANSPARENCY

The trading of commodities will be faster and more transparent through the automation of the processes, allowing the international transfer of tokens for the purchase/sale of products and inputs in general) in just a few seconds;

4- BORDERLESS TRANSACTIONS

Because of the international connotation of cryptocurrencies, a tokenization can reach investors anywhere in the world. Tokenization will provide more liquidity for the agro sector by allowing tokenized assets to be traded every day, 24 hours a day, 7 days a week across the planet;

5 – GREATER LIQUIDITY OF THE INVESTMENT BY THE FRACTIONING OF THE ASSET

Lower investment amounts through the fractionation on the asset that the tokens realize and thus can attract more capital;

6- GUARANTEES

Security for investors, since the token will represent ownership over a specific product, registered and guarded according to the rules defined in theSmart Contract. The security on the token is defined in the legal documents that most regulators use with the same characteristics that guarantee the soundness of the investment. A token holder has the same rights as the asset owner;

7- GOVERNANCE AND MORE TRANSPARENCY

A company planning a tokenization has to go through legal due diligence, technical and financial auditing. The assets that the token represents will also be audited. In the case of agricultural assets, it includes an audit of the state of the property with regard to its ability to generate products;

8- SECURITY

Tokenization requires compliance with KYC (Know-Your-Customer or identification procedure) and AML (Anti-Money Laundering) procedures, as well as other actions and disclosures required by relevant legislation protecting investors.

Source: AgroRevenda