what happen?
DeFi (decentralized finance) platform Tren Finance recently released a "Real World Asset Tokenization (RWA)" report, pointing out that by 2030, the market size may reach between 2 trillion and 10.9 trillion US dollars, depending on the specific number. Estimates from different forecasting agencies.
Currently, according to data from RWA.xyz, approximately US$185 billion in assets have been tokenized, and there is still more than 50 times room for growth compared to the estimated value in 2030.
The report explains that real estate, debt instruments and investment funds will become the three main asset classes for tokenization, driving the rapid development of the entire RWA market.
Stablecoins dominate the RWA market
The meaning of RWA is to tokenize tangible and intangible assets in the real world such as legal currency, watches, real estate, red wine, cards, bonds, etc., and create a virtual avatar in the on-chain world, with the value bound to the real person.
Currently, stablecoins dominate the RWA market, with a market capitalization of over $170 billion, while other tokenized assets such as securities and treasury bonds have a market capitalization of only $2.2 billion.
The report pointed out that Tether (USDT) is currently the stablecoin market leader, with a market share of approximately 69%. In addition to this, approximately 111 million wallets currently hold stablecoin assets, showing the widespread use of stablecoins.
With the emergence of major regulatory policies such as the European Crypto Asset Market Regulation (MiCA) and the Singapore Stablecoin Framework, the stablecoin market will slowly expand, and stablecoin-related infrastructure is also being actively tested and improved, which will attract more institutions in the future. Enter this market.
Regarding the tokenization of real estate, the report believes that "lack of liquidity" and "entry barriers" are the biggest problems currently facing real estate investment. The global real estate market was valued at US$326.5 trillion in 2020, but real estate remains one of the most illiquid asset classes, so “tokenization” provides a solution to enhance market accessibility.
Using blockchain technology, property ownership can be digitized and divided into smaller units, which is called split ownership. This model allows more investors to participate in the real estate market, lowers the threshold, and increases investment flexibility. As tokenization-related technologies and business models gradually mature, real estate tokenization has strong potential to create new business opportunities and change existing real estate operations.
According to (Cryptonews) reports, many financial giants have already entered the RWA field. For example, Goldman Sachs plans to launch three new tokenized products this year targeting the U.S. fund and debt markets. In addition, BlackRock and Franklin Templeton already have their own tokenized products.
What are the development challenges of RWA?
Tren Finance’s report also pointed out key challenges in the development of RWA.
The first is the complexity of supervision. Whether it is general commodities, financial products or real estate, they currently have local legal framework regulations. However, tokenization means that they are facing an international market. Therefore, how local supervision cooperates is still a big problem. subject.
In addition, regulatory uncertainty remains in many regions, coupled with a lack of understanding of tokenization in the traditional real estate industry, further heightening the difficulty.
In addition, although tokenized assets can provide a year-round trading experience, whether it is the tokenization of commodities or real estate, its market success currently relies on institutional investors and traditional market participants. Systems still need to build trust and demonstrate the viability and benefits of these new transaction mechanisms.
Source: Tren Finance, CryptoNews
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