Tokenised commodities have grown from roughly $1.4 billion to over $5 billion in market value. But is this a genuine structural shift in how commodities are traded, or a story still waiting for real liquidity? Joining me today is Dima Nedvetsky, CEO of Navira Financial Markets. Dima, welcome to the show.
Thank you very much for having me.
Do you see real world asset tokenisation as a genuine structural shift, or is it still mostly a narrative ahead of real liquidity?
We probably need to maintain a sense of reality because there is a lot of hype. Tokenisation does not create a new asset. A tokenised ounce of gold is just an ounce of gold — same parameters, same physical features. So when we talk about $5 billion worth of tokenised assets, we need to ask what exactly we are talking about. Is this the rise of gold — which doubled over the last year — or is it about the actual market? I think the technology and the plumbing for tokenised commodities or securities is the same technology we have been using for the last 50 years. We are still using Swift — that is 1973. Clearinghouses, risk models — those go back to 1975. All we have been doing is collapsing the same operating model from T plus five to T plus two. That is not a major innovation.
Where is the actual friction point then — technology, custody, regulation, or trust?
Technology is definitely there. It has been there for many years. I would narrow the friction points to three main issues. First, the legal question — if I own a tokenised ounce of gold, do I own the token issued by an issuer, or do I actually own the asset? In the event of the issuer's default, where do the assets sit? That cannot be resolved with cryptography. That is insolvency law. And we have very different opinions across jurisdictions. Second, atomic settlement of cash. It works for retail. But if you go in size, 99.999% of all transactions are not done in stablecoins. They are still done in normal fiat currencies, which operate in a 2005 framework. Third, regulatory perimeter — even in the US, one regulator is arguing with another about whether we are dealing with a commodity, a security, or a virtual asset.
Will this consolidate into a few blockchain rails, or will the banks crowd it out?
The banks own the settlement system. The banks own the plumbing. And they have been developing that system for almost a hundred years. This is their business model. They built their revenue models and their market valuations on the basis that there is a gap between the trading date and the settlement date. Tokenisation is just rails built on top of the old railway system. The railway is still owned by the same people. We are still settling in the same currencies. We still need a settler of last resort. There is no realistic way to build a systemically sound financial market with entirely new players and new rails. It is just not sustainable.
Thank you very much, Dima. I would love to have you come back and talk about what it would actually take to get there.
Thank you very much.
