Financial institutions will be the main drivers of the growing tokenization industry leading up to 2030, which could potentially see over 50-fold growth.
Real-world asset (RWA) tokenization refers to financial and other tangible assets minted on the immutable blockchain ledger, increasing investor accessibility and trading opportunities around these assets.
Large financial institutions will be the main drivers of the tokenization sector’s significant growth, according to Jesse Knutson, the head of operations at Bitfinex Securities.
Institutions are already driving significant growth in the crypto industry, which could spill over into the tokenization sector, Knutson told Cointelegraph during an exclusive at Plan B Lugano:
“It's the more nimble institutions, the fast movers, like the family offices, those kind of guys. I think they'll have an outsized impact in these early days. But eventually, the benefits of tokenization, they're going to pull in the mainstream institutional investors
Bitfinex Securities’ Jesse Knutson, Interviewed by Cointelegraph’s Zoltan Vardai. Clip 1. Source: YouTube
Some of the world’s largest financial institutions and business consulting firms say the RWA sector may see a more than 50-fold increase by 2030, potentially reaching over $30 trillion.
Tokenized securities: a $ trillion opportunity
Most firms are predicting that the RWA sector may reach a market size of between $4 trillion and $30 trillion by 2030.
RWA tokenization, market size predictions by 2030. Source: Tren Finance
If the sector were to achieve the median prediction of about $10 trillion, it would represent more than 54 times growth from its current value of around $185 billion, including the stablecoin market, according to Tren Finance research report.
Still, stablecoins continue to dominate the RWA sector, accounting for over $170 billion of the market as of October 2024. In comparison, securities and treasuries tokenized onchain is valued at $2.2 billion.
RWA sector will follow the crypto industry’s growth trajectory: Bitfinex
Bitcoin (BTC) saw significant growth this year, rising over 116% year-to-date, after receiving a significant institutional nod in the form of the first spot Bitcoin exchange-traded funds (ETFs) in the United States.
The RWA tokenization industry will likely follow the growth trajectory of the crypto space, explained Bitfinex Securities’ Knutson:
“The consensus view is that markets are going to evolve, and the direction they're probably going to evolve is, is something similar to how the digital asset industry has grown over the years.”
Increasingly, more institutions are betting on the RWA sector’s success, including the world’s largest asset management firm, BlackRock. Other financial institutions are running tokenization pilots, including UBS Asset Management.
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