Commodity tokenization - the digital representation of real-world assets on blockchain - stands as a revolutionary development in agricultural finance on the African continent, thanks to warehouse receipt (WHR) finance model using blockchain technology to issue collateralized loans.
Small-scale farmers face barriers in accessing traditional financial services due to a lack of size, collateral and credit history. These challenges necessitate innovative solutions to enhance market efficiency, improve infrastructure, and provide financial support to farmers.
By digitizing agricultural commodities as tokens on blockchain platforms, farmers can overcome many traditional barriers. This process allows farmers to access global markets more directly, reduce transaction costs, and secure financing against their tokenized commodities.
Agrae's involvement in Commodity Tokenization stems from recognizing both the financing gap crisis in the underserved segment of primary agriculture and the obsolescence of current financial instruments to provide adequate funding to the agri-business sector on the African continent.
Our Agri-Fintech partner in India is the largest issuer of tokenised commodities in the world and is spearheading a transformative shift in the global financial industry through its pioneering approach to asset tokenization.
Agrae Pty Ltd - Cape Town, South Africa
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