Source: PANews
Recently, as Trump won the US election, the crypto market has become more popular, and the RWA track has frequently seen new developments. For example, on November 14, Tether announced the launch of the asset tokenization platform Hadron by Tether, and Visa also released the tokenized asset issuance and management platform Visa Tokenized Asset Platform (VTAP) in early October.
Against the backdrop of regulatory policies becoming increasingly clear, optimism within the industry about the future of tokenization is also increasing. Jesse Knutson, head of operations at Bitfinex Securities, recently pointed out that large financial institutions will become the main driving force for the growth of the tokenization industry. BlackRock CEO Larry Fink sees the tokenization of financial assets as “the next step in future development.”
Giants and platforms such as Tether and Visa are competing to launch tokenization platforms
The core concept of RWA tokenization is to cast financial assets and other tangible assets onto an immutable blockchain ledger, thereby improving the accessibility of investors, increasing liquidity for these assets, and creating more trading opportunities. Save transaction costs and improve security.
According to data from rwa.xyz, as of November 18, the top five issuers (excluding stablecoins) in the RWA track’s total value (excluding stablecoins) are BlackRock (US$542 million) and Paxos (US$506 million). USD), Tether (USD 501 million), Ondo (USD 452 million), Franklin Templeton (USD 410 million).
The RWA track is heating up along with the overall rally in the crypto market. On November 14, Tether, the issuer of the stablecoin USDT, announced the launch of Hadron by Tether, an asset tokenization platform that simplifies the process of converting various assets into digital tokens. The platform allows users to easily tokenize stocks, bonds, commodities, funds and reward points. According to the official introduction, Hadron aims to open up new opportunities for individuals, businesses, and even online nations to use tokenized collateral to raise funds. Hadron not only provides risk control, asset issuance and destruction, KYC and anti-money laundering compliance guidance, but also supports blockchain reporting and capital market management.
Technically, Hadron supports Ethereum, Avalanche and Blockstream’s Bitcoin scaling network Liquid, and will soon add the TON network and other smart contract chains.
At the same time, giants in the traditional financial industry are not far behind. Visa launched the Visa Tokenized Asset Platform (VTAP) on October 3 to simplify the issuance and management of tokenized assets, including tokenized deposits, stablecoins, and central bank digital currencies (CBDC). Through VTAP, financial institutions can create and test their own fiat-backed tokens using a sandbox environment provided by the Visa Developer Platform.
While providing support to institutions, some projects have also begun to focus on the potential of the retail market. On October 8, EU tokenization protocol Midas opened mTBILL and mBASIS tokens to retail traders. It is reported that the tokenization company received regulatory approval from the Liechtenstein Financial Markets Authority to open the funds to retail traders, making Midas’ Real World Asset (RWA) token the only one in Europe that does not have a minimum investment limit of $100,000. of regulated encryption tools.
On the other hand, the tokenization of specific asset types is also attracting the attention of professional investors. At the end of October, Elmnts, a tokenized fund platform backed by oil and gas concessions, announced on X that it had launched public beta on Solana. Elmnts is a compliant investment fund tokenization platform. The funds are backed by royalties, revenue generated by companies that extract oil and gas on land owned by the fund. The platform is currently mainly targeted at institutions and high-net-worth individuals.
In addition, participants in the DeFi industry are also trying to explore more innovative paths by cooperating with traditional financial giants. Earlier this year, DeFi protocol Ondo also began leveraging the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) tokenized money market fund to develop its derivatives products.
Source: Tren FinanceRWA Ecological Picture
Regulation is expected to become clearer, and the third revolution in asset management is coming
Global consulting firm Boston Consulting Group (BCG) called RWA tokenization “the third revolution in asset management” in a paper on October 29. Some people believe that ETFs are the core of Asset Management 2.0, and tokenization may be the era of Asset Management 3.0. Boston Consulting Group believes that in just seven years, the managed assets of tokenized funds may reach 1% of global mutual fund and ETF managed assets, which means that by 2030, managed assets will exceed $600 billion; it is expected that in the next period This trend will continue, especially when regulated on-chain currency projects such as regulated stablecoins, tokenized deposits, and CBDC come to fruition.
The forecasts reported by Tren Finance in October are even more radical. They believe that the scale of the real world asset (RWA) tokenization industry may exceed US$30 trillion by 2030, and is expected to grow by more than 50 times. Behind its rapid development is not only the promotion of flexible financial institutions and mainstream financial institutions, but also the advancement of blockchain technology and the gradual clarity of supervision.
Against the backdrop of continued gains in the crypto market, increased regulatory clarity has injected new confidence into the industry. Venture capital firm a16z Crypto noted in a recent official website post for crypto founders: “The good news is that there is now a path to constructive engagement with regulators and legislation that can bring regulatory clarity that you should all feel. The ability to explore all the ground-breaking products and services supported by blockchain, including tokens.”
The post specifically noted that token issuance is an activity in which founders can be more confident: “For many of you, you have been delaying the use of tokens to distribute project control and build community due to concerns about over-regulation. Group, now you should have more confidence in the project using tokens as a legal and compliant tool.”
Meanwhile, Jesse Knutson, head of operations at Bitfinex Securities, said that large financial institutions will be the main driving force behind the significant growth of the tokenization industry. Knutson said institutions are already driving significant growth in the crypto industry, and this impact may extend further to the tokenization industry.
The positive expectations for RWA tokenization have also been echoed by more professional practitioners. Larry Fink, CEO of BlackRock, the world's largest asset management company, recently said that "tokenization of financial assets will be the next step in future development." He pointed out that in the future, each stock and bond will have a unique identification code (similar to CUSIP), all transactions will be recorded on a unified ledger, and investors will also receive exclusive identification. Fink said that tokenization can not only effectively prevent illegal activities, but more importantly, it can achieve instant liquidation and significantly reduce the settlement costs of stocks and bonds. In addition, tokenization will also bring the possibility of personalized investment strategies, improve corporate governance efficiency, and ensure that each shareholder can exercise their voting rights in a timely and accurate manner. Tokenizing real-world assets such as real estate, commodities, wine or art means creating blockchain tokens that represent ownership, making it easier to trade these traditionally difficult-to-sell assets.
Specifically, bonds are expected to lead the mass adoption of tokenized real-world assets due to their structural characteristics, according to a paper from State Street Global Advisors. Its report stated that the bond market is mature for tokenization; the complexity of these instruments, the duplication of issuance costs, and the high degree of competition among intermediaries both support rapid adoption and provide space for significant impact; Blockchain technology can play an important role in markets where transaction speed is important, such as buybacks and exchanges.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reproduced with permission from: (PANews)
Original author: Weilin, PANews
"The RWA track is heating up across the board! Tether and Visa are competing for deployment. Why are institutions optimistic? 』This article was first published in "CryptoCity"
