Tokenization of Real World Assets: Rapid Growth Ahead
A recent analysis predicts that asset tokenization will reach $30 trillion by 2030, driven by advancements in blockchain and the backing of major financial institutions.
Tokenization of Real World Assets: Rapid Growth Ahead
A new analysis predicts $30 trillion in asset tokenization by 2030.
What if I told you that experts might be underestimating the growth potential of asset tokenization? Numerous consulting firms and financial institutions have released predictions regarding the expansion of tokenization by the end of the decade. Their estimates vary significantly, ranging from $2 trillion by McKinsey to $16 trillion according to BCG. That’s a staggering difference of $14 trillion!
Since 2017, various attempts have been made globally to tokenize assets, covering almost every asset class. Currently, more than $50 billion of stocks, bonds, and real estate have been tokenized, with major institutions like BlackRock, Franklin Templeton, and Apollo investing heavily in this technology. Furthermore, over $200 billion tied to stablecoins represents a significant portion of Real World Assets (RWAs).
What will the future hold when this growth accelerates? We anticipate a leap from the current valuation of $250 billion to $30 trillion by 2030, largely due to newly clarified regulations surrounding crypto in the U.S.
A Major Boon for America and the World
From the Federal Reserve to Congress and the Presidential administration, there is a growing recognition of the role stablecoins can play in enhancing the U.S. dollar’s global dominance. If the dollar serves as the world reserve currency in the Web2 environment, why shouldn’t it in the Web3 ecosystem as well? More individuals purchasing stablecoins, which are mostly dollar-denominated, would benefit the U.S.
With positive attitudes toward crypto, we expect substantial clarity in market structures through pending legislation. The impending approval of such a bill could clear the way for blockchain integration in U.S. capital markets. Prior forecasts overlooked the potential impact of this government-wide support for crypto, stablecoins, and RWAs.
The demand for stablecoins and yieldcoins could surge from their current valuation of $220 billion up to $3 to $5 trillion by 2030, as adoption increases and the desire for digital assets grows.
The tokenization revolution seems inevitable, as affirmed by the leaders of BlackRock and JP Morgan, who have been vocally supportive of the transition.
Is All Asset Tokenization Feasible?
Some skeptics question whether the vast ranges of assets—from stocks to real estate to bonds—can all be tokenized. In a few years, those doubts may turn into recognition of tokenization as a financial necessity (which it is).
The answer remains affirmative: yes, every asset class can be tokenized. However, the speed of adaptation will vary across asset categories. Some will seek transition faster due to market pressures, while others may require more time to embrace tokenization.
Conversations with banks, asset management firms, and crypto exchanges reveal a renewed enthusiasm for asset tokenization, particularly as regulators gain a clearer understanding of blockchain benefits, indicating that the expected growth may surpass previous predictions.
Reasons for High Growth Estimates
Some earlier predictions were based on minimal adoption percentages. Analysis conducted by STM, however, considers government and regulatory support as crucial growth factors. Consider California’s property registry: putting that on-chain could enable a residential market worth $10 trillion to migrate quickly to blockchain.
Given the favorable regulatory climate in the U.S. and the success of stablecoins, we anticipate that the worldwide adoption of blockchain will accelerate, ultimately leading to up to $50 trillion in RWA trading annually by the decade’s end.
It’s time to unleash the potential of tokenization! Read the full report here.
