A new report from digital asset management firm 21.co finds that the market for tokenized assets, known as RWA tokens, could reach the $10 trillion mark during this decade as traditional financial institutions (TradFi) continue to adopt blockchain technology.
According to the report, the estimate is that the market value for “real world” tokens will vary between US$3.5 trillion in the pessimistic scenario and US$10 trillion in the optimistic scenario by 2030
21.co's forecast joins a series of recent reports and predictions about the potential for tokenization of real-world assets (RWA), the term used for the integration of traditional financial products such as private equity, debt and real estate, into blockchain networks.
According to Bank of America, tokenization can transform existing financial infrastructure, increase efficiency, reduce costs, and optimize supply chains.
A report from the Boston Consulting Group estimated earlier this year that the market for these tokens could reach US$16 trillion.
Analysts at 21.co state that the crypto market is going through a maturation phase, and traditional institutions are increasingly adopting blockchains and developing products based on them.
RWA Tokens
The report argues that “cryptocurrencies are transitioning from a period of frenzy to synergy.” During this transition, cryptocurrencies will increasingly integrate existing financial software and bring real-world assets onto blockchains through tokenization.
Currently, 21.co estimates that the market for tokenized assets is valued at around $116 billion, with the Ethereum (ETH) smart contract network housing nearly $60 billion of these assets, followed by Tron (TRX) and Solana (SUN).
“Digital dollars,” also known as stablecoins, which are cryptocurrencies pegged to the US dollar, represent the “first successful implementation of tokenization,” making up 97% of all tokenized assets, as highlighted in the report.
Other types of tokenized assets, including US government bonds, have experienced growth of over 450% this year, driven by rising interest rates on these traditional instruments, outpacing yields available in decentralized lending (DeFi) markets.
Despite the promising growth of these tokens, regulatory restrictions, lack of standardized processes, and socioeconomic circumstances such as low internet penetration are factors that pose obstacles to the widespread global accessibility of real-world tokenized assets, according to 21.co.