Tokenization Of Real-World Assets Expected To Surge By 2030

Explosive Growth of Tokenization in Real-World Assets

According to PANews, recent research conducted by leading traditional financial institutions indicates that the tokenization of real-world assets (RWAs) is on the brink of experiencing remarkable growth over the next five years. By 2030, assets under management could potentially exceed a staggering $600 billion.

The Third Revolution in Asset Management

In a paper published on October 29, the global consulting firm Boston Consulting Group (BCG) described RWA tokenization as the "third revolution in asset management." The report estimates that in just seven years, tokenized funds could manage assets equivalent to 1% of global mutual funds and ETFs, which translates to over $600 billion by 2030.

Factors Driving Growth

This trend is particularly expected to continue with the advent of regulated on-chain currencies, including:

Regulated stablecoins
Tokenized deposits
Central Bank Digital Currencies (CBDCs)

Bonds Leading the Charge

A separate paper released by State Street Global Advisors emphasizes that bonds could spearhead the large-scale adoption of tokenized RWAs. The report highlights several compelling reasons:

The bond market's maturity makes it well-suited for tokenization.
The complexity of these instruments and the repetitive nature of issuance costs enhance efficiency.
High competition among intermediaries fosters rapid adoption and significant impact.

Furthermore, blockchain technology can play a pivotal role in markets that prioritize transaction speed, such as repos and swaps.

Increased Research and Activity

According to industry analysis platform rwa.xyz, there has been a notable increase in research papers concerning RWAs published by various institutions and asset management firms. The platform reported that the total off-chain value of RWAs currently stands at $13.25 billion, witnessing a remarkable 60% increase year-to-date.

Conclusion

The tokenization of real-world assets is set for significant advancement, positioning itself as a game changer within the asset management landscape. As more institutions recognize the potential and advantages of RWAs, the future looks promising.