Policy makers and researchers recently met at ADBI for a workshop examining green infrastructure investment, policy challenges, and economic implications in Asia. Marco Schletz from the United Nations Environment Program Technical University of Denmark Partnership was among the experts featured at the event. Afterwards, Schletz sat down with Asia’s Developing Future to discuss how blockchain and tokenized securities could revolutionize green finance and inclusive development in the region.
Currently, projects often depend on their commercial bank as the sole funding opportunity. Schletz explains that tokenised securities are an innovative financing mechanism that is based on blockchain technology. These enable projects to disintermediate from commercial banks, because projects can be offered on a global base and everyone can participate in funding. This global investor base also increases liquidity. Tokenised securities are particularly relevant for green assets. Comparing green bonds with a normal bonds, green bonds pay a premium for certification costs and these costs can pose a financial barrier to project development if you look at small and medium-sized projects. Additionally, tokenised securities offer small projects the opportunity to access funding usually monpolised by large projects.
Schletz uses the example of solar-panel funding to illustrate the benefits of tokenised securities, and describes the need for better regulation to grow the tokenised security industry. Schletz concludes by highlighting the potential for tokenised securities to increase community participation and ownership in green projects moving forward.