To celebrate its 20th anniversary, Korea IT Times is presenting special contributions that share the profound insights of opinion leaders from Korea and abroad. Following the notable experts who authored articles in July and August, we introduce the contributors for September:
- Prof. Jong-Shik Kim: Digitalization and Digital Transformation.
- Hyunseok Shin, CEO of Smilegate Vietnam: Changes and Strategies in Software Development due to AI (Part 1).
- Sukhvinder Singh: South Korea's Economic Miracle: A Critical Analysis of Challenges and Future Prospects.
- Agustín Liserra, CEO and Co-founder of Num Finance: Stabilizing Volatile Markets: RWA Investments, Carry Trade, and Currency Risk Strategies.
- Hyunseok Shin, CEO of Smilegate Vietnam: Can AI replace the technical skills of developers leading the digital world? (Part 2)
- Alex Haigh, Managing Director Asia Pacific, Brand Finance: Brand Resilience: How South Korea's Leading Brands Adapt to Market Fluctuations.
- Jinkook Kim, CEO of Coreline Soft: The New Changes AI will Bring to the Emergency Room.
- Josh Lee Kok Thong, FPF Managing Director Asia Pacific: APAC is at Risk of AI Regulatory Fragmentation.
- New Role for the Asia Institute building closer ties between US, Korea, and Japan.
- Hyunseok Shin, CEO of Smilegate Vietnam: Replacement of software development due to AI, present and future((Part 3).
By Agustín Liserra, CEO and co-founder of Num Finance
Global financial markets are currently facing significant instability, prompting stakeholders ranging from individuals to governments to seek explanations. Among the contributing factors is the "carry trade" strategy, where investors borrow in a low-interest-rate currency to invest in higher-yielding assets. While this approach has been identified as a source of disruption in stabilized markets, it has simultaneously offered a pathway to increased stability for emerging markets, enabling them to better compete on a global stage.
Tokenized Assets and the Digital Finance Ecosystem
nTokens, or tokenized assets, have become a cornerstone of the digital finance landscape. These tokens represent digital versions of real-world assets and allow investors to engage with traditional financial products such as currencies, bonds, ETFs, and stocks via blockchain technology. This system provides users with streamlined access to these assets, eliminating the need for complex legal processes and intermediaries commonly involved in cross-border transactions. Furthermore, nTokens bridge traditional finance and decentralized finance (DeFi), integrating blockchain's security and efficiency with the stability of tangible assets. Their functionality also extends to on-chain applications, such as securing loans and leveraging.
Learning from Argentina’s Economic Challenges
Argentina’s recent economic turmoil highlights the necessity of diverse and stable financial instruments during volatile periods. Assets that remain uncorrelated with local economic conditions can provide a safeguard against economic instability. In this regard, real-world assets (RWAs) have the potential to contribute significantly to stabilizing volatile markets, like those in Asia, by offering access to stable global financial instruments that can endure local economic fluctuations. Tokenized RWAs allow investors to diversify their portfolios further and mitigate domestic market risks, facilitating a more stable and secure investment environment during uncertain economic times.
Managing Carry Trade and Currency Risk
Navigating the challenges of carry trade, especially concerning currency and interest rate fluctuations, requires a thorough risk management strategy. Success in these strategies depends on access to liquid assets within deep markets, allowing investors to execute strategies at reduced costs and effectively manage associated risks.
The Growth of Blockchain in Asia
Asia has experienced remarkable growth in blockchain and decentralized finance adoption, driven by a tech-savvy population and a demand for innovative financial solutions. The region has witnessed rapid integration of blockchain technology across various sectors, and regulatory environments are gradually evolving to become more favorable toward digital assets and blockchain applications.
However, this rapid expansion presents challenges in ensuring stability and security. Tokenizing RWAs and integrating traditional finance with blockchain can provide the necessary foundation for sustainable growth in Asia’s dynamic markets. By offering secure, regulated, and diversified financial products, there is a substantial opportunity to enhance the industry’s long-term resilience in the region.
About the Author
Agustín Liserra is the CEO and co-founder of a pioneering technology firm specializing in the tokenization of real-world assets, known as Num Finance. An expert in carry trade, Liserra has conducted extensive research into its impacts on emerging markets. Num Finance is at the forefront of revolutionizing investment through blockchain-enabled services, particularly through the provision of tokenized real-world assets like nTokens. This approach grants investors access to previously inaccessible traditional financial instruments, promoting portfolio diversification in a decentralized and accessible manner. Agustín Liserra is based in Buenos Aires, Argentina, and is an alumnus of the Georgia Institute of Technology.
