New Opportunities in Non-Stablecoin Tokenization Identified by Standard Chartered
Standard Chartered's latest report highlights the potential expansion of tokenization beyond stablecoins, focusing on illiquid assets and private markets.
Key Insights
- Market Overview: Tokenization primarily revolves around stablecoins, while non-stablecoin assets represent a considerable growth opportunity, according to Standard Chartered.
- Regulatory Landscape: Improved regulatory clarity is paving the way for advancements, yet varying KYC policies continue to present hurdles.
- Future Growth Focus: Targeting illiquid assets like private equity and commodities, which can significantly benefit from tokenization, is where the bank forecasts future developments.
Tokenization, central to blockchain’s appeal, is generating rising interest and funds from traditional finance sectors. Presently, non-stablecoin real-world assets total around $23 billion, only 10% of the stablecoin market size, indicating vast potential as regulations evolve and asset strategies transition towards blockchain benefits.
Regulatory progress is evident in regions such as Singapore, Switzerland, and the EU. Nevertheless, the lack of consistent KYC regulations remains a significant obstacle. Standard Chartered indicates that effective tokenization efforts should emphasize on-chain assets that demonstrate true economic advantage, whether through lesser costs or greater liquidity compared to their off-chain counterparts, which will unlock their growth potential.
