Author: Jason Jiang, OKG Research
From Bitcoin spot ETFs to the wave of tokenization, institutional forces represented by Wall Street are profoundly influencing and changing the direction of the crypto market, and we believe that this force will become even stronger by 2025. OKG Research has launched the "#Onchain Wall Street" series to continuously focus on the innovations and practices of traditional institutions in the Web3 field, observing how top institutions like BlackRock and JPMorgan embrace innovation. How will tokenized assets, on-chain payments, and decentralized finance shape the future financial landscape?
This article is the first in the "#Onchain Wall Street" series of research.
Investment management firm VanEck boldly anticipated that in predicting the crypto market for 2025, Coinbase would "take unprecedented steps to tokenize its stock and deploy it on its Base blockchain." The prophecy seems to be coming true: Jesse Pollak, the main developer of the Base chain, recently revealed that providing $Coin on the Base chain is "something we are researching in the new year" and expects that "eventually every asset in the world will be on Base."
We are still unclear whether Coinbase can realize its plans, but as it uses its own stock as a starting point for tokenization exploration, Wall Street is also accelerating "Onchain."
Wall Street begins to migrate on-chain
Since 2024, the crypto market has experienced rapid growth, with the boundaries of innovation continually expanding. The core driving force behind this is the cryptocurrency spot ETFs pushed by Wall Street institutions represented by BlackRock. Today, these institutions are shifting more attention to the field of tokenization.
Larry Fink, CEO of BlackRock, stated that while the approval of crypto spot ETFs is important, these are "stepping stones" to a broader tokenization of other assets. With the tokenization boom, Wall Street is pushing more assets and businesses on-chain, allowing traditional finance and crypto innovations to spark more synergy in the digital space.
Although financial asset tokenization has been happening since 2017, it has only recently taken off wildly. Unlike early explorations that focused on permissioned chains, an increasing number of tokenization practices are gathering on public chains, with Ethereum becoming the preferred choice for institutional tokenization. These institutions are no longer rejecting decentralization; instead, they are actively exploring the radius of crypto influence, attempting to provide new experiences by recombining assets and technology. As Coinbase puts it, "Web3" is gradually being replaced by the more fitting "Onchain."
This time, the protagonists are no longer just cryptocurrencies, but many assets from the physical world, such as stocks. As the largest cryptocurrency exchange in the United States, Coinbase is currently the most popular stock subject in the tokenization market. Data from rwa.xyz shows that as of January 2025, the total market value of tokenized stocks is approximately $12.55 million, with tokenized stock shares of Coinbase accounting for nearly 50%. In addition, tokenized stocks of major U.S. tech giants like Nvidia, Tesla, and Apple frequently appear on-chain.
Chart: Market structure of tokenized stocks
Coinbase plans to tokenize its stock and issue it on the Base chain, which not only allows investors to trade their stocks directly on-chain but also further integrates trading platforms, the Base chain, and the on-chain asset ecosystem, exploring a compliant and viable stock tokenization model in the U.S., keeping it ahead in the competition of crypto financial innovation.
This layout must not only be for $COIN tokenization. Perhaps, as Jesse Pollak said, they hope that all assets in the world will be on the Base chain. However, compared to that, accelerating the migration of major global assets on-chain through tokenization is a more foreseeable future.
Despite being subject to skepticism like other innovative concepts, the idea centered around democratizing investment opportunities and simplifying capital flow efficiency has taken deep root. The on-chain availability demonstrated by stablecoins, BUIDL funds, and other tokenized assets has proven its value, and an increasing number of asset classes are migrating on-chain: not only common private credit, bonds, funds, and gold, but also agricultural products, carbon credits, rare minerals, and more.
According to predictions from OKG Research Institute, by 2025 we will see Wall Street continue to frequently "Onchain" and drive the tokenization system to be richer and more mature: not only will the on-chain tokenized asset scale of non-stablecoins exceed $30 billion, but we will also see more enterprises entering the tokenization field under the leadership of Wall Street, bringing more valuable assets on-chain. Although the scale of tokenization for these assets may not be "exaggerated," it is still significant.
Towards a more democratized future of finance
Sixty years ago, when you purchased financial securities or used them as collateral, you might have to wait five days to receive a paper certificate to confirm the transaction; later, as paper certificates became more numerous, trade settlement became unmanageable, forcing Wall Street to begin experimenting with computers to track securities.
Today, gaining a competitive trading advantage from better or faster technology is an integral part of modern finance. Whether it's BlackRock and Goldman Sachs, or Citibank and JPMorgan, almost everyone on Wall Street believes that tokenization is the trend of the future and is embracing the changes brought by it. Compared to the passive nature of financial informatization, tokenization is the next active transformation in finance.
In this transformation, deploying assets on-chain through tokenization is no longer a challenge; the future challenge lies in how to increase demand for tokenized assets to solve the on-chain liquidity problem. The unparalleled success of traditional securities is largely due to their high liquidity and low trading costs. If tokenized assets are merely locked on-chain or can only trade in limited liquidity secondary markets, their actual value will also be very limited.
Nadine Chakar, who previously managed the digital assets department at State Street Bank, has expressed similar views: "A bank collaborates with a company to issue tokenized bonds and then issues a press release. What happens next? Nothing happens. These bonds are like stones, very difficult to circulate in the market."
How to solve the liquidity problem in the tokenization market? Different institutions may have different solutions, but in my opinion, the most direct way is to accelerate the tokenization of quality assets. Only by accumulating a sufficient amount of quality assets on-chain can we attract more users and funds to migrate on-chain, thus solving the liquidity issue.
Chart: McKinsey predicts tokenization scale will approach $20 trillion by 2030
As network effects strengthen, tokenization is now shifting from pilot projects to large-scale deployment. However, as predicted by McKinsey, tokenization cannot be achieved overnight; there will be a noticeable time lag in the tokenization process of different assets: the first wave will be driven by use cases with proven investment returns and existing scales, followed by use cases for currently smaller market assets with less obvious benefits or those that need to address more severe technical challenges.
When the first wave of on-chain asset explorations discovers compliant and viable business models and brings enough attention and liquidity to the on-chain market, perhaps tokenization will create a freer and more democratic "shadow" capital market in the future. It will provide investors with freer investment opportunities, allow more companies to complete financing more conveniently, and tokenization will bring profound changes to both supply and demand sides of assets, gradually eliminating the barriers between the off-chain and on-chain worlds, forming a truly globalized new financial ecosystem.