To this day economists claim that the root cause of the 2008 crisis is yet to be addressed. Some say that the attempts to address the circumstances of the crisis have in fact made the system more sensitive to a catastrophic breakdown. Some say, with each crisis we become more resilient and strong in the face of trouble. Either way, we feel that humanity will find the solution this time, just like it did many times before.
The time to try new approaches to moderate liquidity events is now and an examination of the systemic flaws that steered us towards the crisis leads to the promise of tokenisation. The looming liquidity trap exasperates risks for existing financial market participants and limits governments in addressing the upcoming recession. The benefits of asset tokens derived from the powers of blockchain suggest that a new path to liquidity that prevents economic downturns such as the one we are experiencing today is already paved, and we are ready to walk it.
While the forces behind the toxicity of the instruments of the previous crisis remain debatable, there is an agreement on the structural flaws that intensified the current collapse. All things considered, even with the virus centerstage we ought to agree that the current crisis, at its core, is an issue of transparency, overleveraging, lacking government policies, and continuous liquidity events. But policy and regulation are clearly not enough to solve systematic problems that arise every seven to ten years like clockwork, so some years ago we resorted to a decentralised approach, one that would utilise the obvious benefits of distributed ledger technology to help solve the problems with transparency and liquidity. The era of security tokens seemed to have begun.
However, it appears that organic mass adoption of decentralised apps and services will take more years than we forecasted in 2017. Conservatively, blockchain-based digitalisation of all asset classes to the extent that would allow businesses issue equity without tedious, time and money consuming redundant procedures is a long shot.
At the time of our presenting the roadmap for the strategic development of Smartlands in May 2019 at the Consensus event in New York, we laid out a four-year plan that would encompass all of our aspirations. Today we realise that the inner workings of the global economy will never be the same after the Covid-19 pandemic. The economic and technological outlook that prompted us a year ago to map out our timeframe the way it was mapped has changed forever.
We are getting ready, and call upon you to get ready for rapid unravelling of new challenges in financial markets and digital assets space. Together we need to circle the wagons around our common goals and values we believe in very deeply and remember that with every closed door, fate opens a window. In the case of Smartlands, the window of opportunity that opens before investors in asset-backed digital securities worldwide is absolutely unprecedented. The reality of capital markets shows high time for firms like Smartlands to take the reins of the international value trade and focus on benefits we can deliver to investors. The decentralised market for digital assets knows no boundaries, it’s borderless, seamless, fluid, fast, and accessible. It’s highly transparent because legal frameworks in existence right now are tightly wound to stave off illicit activities and shady market participants. The size of the asset pool ready to be tokenised on the blockchain is immeasurable; the closest estimate that could be produced is that it’s in the tens of trillions. It’s all a matter of common sense and perspective: at a time when physical borders are closed XIX-century style, the vision of an open, limitless and trustless decentralised global trade when value can be represented by a piece of code on a blockchain seems extremely vivid. Not to sound cynical or unseemly blithe, but the Covid-19 is the perfect embodiment of the hurdles the blockchain technology was conceived to tackle in the first place. With the virus pushing up to the surface everything that’s wrong with the world, all the faults of the financial markets, all the undue strains on business we realise that the only viable direction forward is the decentralised and free flow of capital, money, and resources.
Today, the adoption of such an instrument of truly free trade as asset-backed tokens is crucial. We want Smartlands to set the stage for global adoption of asset-backed digital securities for the real economy. We want to continue working towards creating a stable and functional global regulatory environment. We have the technology, vision, and the community behind us to serve as a decisive harbinger of great things to come providing a toolbox for investors worldwide as the U.S. and other economies try to navigate toward calm waters in 2020 and beyond.