Author: Martin Young, CoinTelegraph; Translated by: Wuzhu, Jinse Finance
According to several new research papers from major traditional financial institutions, the tokenization of real-world assets (RWA) is expected to see explosive growth in the next five years, with managed assets possibly exceeding $600 billion by 2030.
Global consulting firm Boston Consulting Group referred to RWA tokenization as 'the third revolution in asset management' in a paper published on October 29.
David Chan, Managing Director and Partner at BCG, stated: 'We see a growing demand from investors for the field of tokenized funds.'
The paper, co-authored by Aptos Labs and Invesco, predicts that within just seven years, assets managed by tokenized funds will reach 1% of the global mutual fund and exchange-traded fund (ETF) asset management scale.
Researchers noted: 'This means that by 2030, the scale of asset management will exceed $600 billion.'
Reports suggest that by 2030, the industry's growth rate could be as high as 50 times.
Chan added: 'We expect this trend to continue for some time, especially as regulated on-chain currencies (such as regulated stablecoins, tokenized deposits, and central bank digital currency (CBDC) projects) become a reality.'
Development of tokenized real-world financial assets. Source: BCG
Additionally, according to another paper from State Street Global Advisors, large-scale adoption of tokenized real-world assets is expected to be dominated by bonds, as the structural characteristics of bonds make them an ideal choice for blockchain issuance.
State Street researchers wrote in an October report on the tokenization of capital market assets: 'The time is ripe for the bond market.'
Elliot Hentov, Head of Macro Policy Research, and Vladimir Gorshkov, Macro Policy Strategist, stated: 'The complexities of these instruments replicate the nature of issuance costs, and intense competition among intermediaries supports the rapid adoption rate and the space for significant impact.'
They added that blockchain technology could play a significant role in markets that 'value transaction speed (such as repos and swaps).'
The report explains that bonds are essentially debt instruments with a fixed maturity date, having three main characteristics that make them very suitable for tokenization: recurring costs that can be reduced through tokenization, complexities that can be automated via smart contracts, and collateral that can be facilitated through on-chain transfers.
The bond market is where tokenization is already visible. Source: State Street Bank
The report also points out that private equity funds show high transformational potential, but the adoption potential of public stocks is lower due to the current system functioning well.
Researchers indicated that real estate and personal private equity tokenization face significant challenges, while commodities offer the potential for direct ownership but face regulatory limitations.
The Financial Stability Board also released a research paper on asset tokenization this month. It stated that the adoption rate of RWA tokenization is low but growing, with most government debt tokenized, followed by debt funds, payment tokens, and commodity equity.
The platform shares that the total non-chain value of RWA is $13.25 billion, growing 60% year-to-date.