When we talked about tokenized commodity assets making a difference for small-holder farmers, I am sure many of us are sceptical. After all, the world has become increasingly financialized over the last 3 decades, and every so-called innovation seems to benefit the 1% (or the 0.1% or the 0.01%) as all the gains in productivity in western economies in the last decades have gone to the elites during this period of financialization.

So how can farmers — particularly the 500m small-holder farmer in emerging markets that are Binkabi’s focus — benefit from commodity asset tokenization? Well, let’s looks at what…

It is reported that around 1900, the famous physicist Lord Kelvin said ‘ There is nothing new to be discovered in physics now. All that remains is more and more precise measurement.’

Of course, we all know what happened next. Classical (Newtonian) physics was completely upended by Einstein and we are still grappling (120 years later) with how the universe actually works.

We are at a similar inflection point with our thinking about the monetary system.

When I was in Economics grad school in 1980, everyone seemed to think we had pretty much worked out monetary theory. The Fischer equation…

What is the difference between $20 in cash and getting $20 out of the ATM machine? The answer to this seemingly simple question raises profound philosophical questions, and points the way to why Blockchain is revolutionary.

Ledgers are life

The answer is that the $20 is yours … your ownership of it does not depend on anyone telling you it is yours. But the $20 you try to take out of the ATM only exists because the bank’s ledgers say it exists. If the bank’s ledger says you don’t have $20 … you don’t. …

We had the great privilege of being part of this event April 19th, organized by Leland Rice who leads Dedalus Global.

Binkabi was named Start-up of the Year at Africa Fintech Summit Washington D.C.

Blockchain and cryptocurrenies have immense potential to help transform Africa. In these countries, inability to authenticate identity, lack of trust, and no single version of the truth are all huge barriers — but barriers that can be overcome Blockchain and cryptocurrencies.

Many big names in the Africa and global FinTech space were there — ConsenSys, SureRemit (recent successful $7m ICO), World Bank’s top Blockchain specialist (Katherine A. …

A big focus of Binkabi is to fix this problem. Essentially, we need to tokenize assets — both land and the commodity products as they move across the chain — to create secure, well-understood, liquid, tradable assets.

Binkabi’s mission is to improve the incomes of the 500m farmers in emerging markets. Currently, the international trading system in commodities is structured in such a way that the farmers receive a disproportionately small amount of the value in the chain, while bearing a disproportionate amount of the risk.

Dead capital is the concept that many assets in emerging markets — primarily real…

Emerging markets on the move

One of the key features of the Binkabi Platform is the use of smart bartering to eliminate the use of the USD in trade between countries where neither uses the USD. The USD hegemony — as we have noted — creates considerable costs for emerging market countries, costs that are ultimately borne by the weakest player in the supply chain.

Consider oil for the moment. The world uses about 95 million barrels per day. The US uses close to 20m barrels, so this means non-USD countries use about 75m barrels. Of course, oil producing countries refine their own, so total…

Farmers harvesting cacao on 50 Cedes banknote c. 1980 (Shutterstock.com)

Binkabi has been set up to make trading between Emerging Markets (EM) more efficient and to make sure more of the benefits of this trade flow through to the 500 million farmers in these Emerging Markets.

Binkabi’s core innovation empowers people in developing countries to trade securely and cheaply with each other without the use of a hard currency. Binkabi’s unique Barter Block model matches trades between importers and exporters across specific corridors, reducing or eliminating the requirement to source USD (on both sides) of EM-EM trade.

Overall, Binkabi helps Emerging Markets to balance current accounts and preserve hard currencies…

Photo credit: Dan Harrison

The global financial system — based on the Bretton Woods agreement between Allied countries after WW2 — still largely uses the USD as a reserve currency, with a massive amount of global trade reliant on the USD as the currency of the trade even when neither the importing nor the exporting country uses USD (or in some cases Euros). Think of oil for Nigeria or Angola and copper for Zambia or the DRC. This drives up the costs of trade, as an importer and exporter in different Emerging Market countries with their own currencies are forced to use USD, requiring…

Andrew S. Nevin

Focused on transforming the world’s economy for the benefit of all. Co-Founder and Chief Economist of Binkabi (www.binkabi.io)

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