Author: Weilin, PANews
Recently, with Trump's victory in the US elections, the crypto market has seen a surge in activity, and the RWA sector has frequently welcomed new developments. For example, on November 14, Tether announced the launch of the asset tokenization platform Hadron by Tether, while Visa also unveiled the Tokenized Asset Issuance and Management Platform, Visa Tokenized Asset Platform (VTAP), in early October.
In the context of gradually clarifying regulatory policies, the industry's optimism 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 behind the growth of the tokenization industry. Larry Fink, CEO of BlackRock, views the tokenization of financial assets as "the next step in future development."
Giants like Tether and Visa are vying to establish themselves by launching tokenization platforms.
The core concept of RWA tokenization is to mint financial assets and other tangible assets onto an immutable blockchain ledger, thereby enhancing investor accessibility, improving the liquidity of these assets, creating more trading opportunities, while saving transaction costs and increasing security.
According to data from rwa.xyz, as of November 18, the top 5 issuers by total value in the RWA sector (excluding stablecoins) are BlackRock ($542 million), Paxos ($506 million), Tether ($501 million), Ondo ($452 million), and Franklin Templeton ($410 million).
The RWA sector is heating up alongside the overall rise in the crypto market. On November 14, stablecoin issuer Tether announced the launch of the asset tokenization platform Hadron by Tether, which 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, companies, and even network states to raise funds using tokenized collateral. 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 TON network and other smart contract chains.
Meanwhile, traditional financial giants are also keeping pace. Visa launched the Visa Tokenized Asset Platform (VTAP) on October 3, aiming to simplify the issuance and management of tokenized assets, including tokenized deposits, stablecoins, and central bank digital currencies (CBDCs). Through VTAP, financial institutions can create and test their own fiat-backed tokens in a sandbox environment provided by Visa's developer platform.
While providing support to institutions, some projects have also begun to focus on the potential of the retail market. On October 8, the EU tokenization protocol Midas opened mTBILL and mBASIS tokens to retail traders. It is reported that this tokenization company has obtained regulatory approval from the Financial Market Authority of Liechtenstein to open these funds to retail traders, making Midas's real-world asset (RWA) tokens the only regulated crypto tool in Europe without a $100,000 minimum investment limit.
On the other hand, the tokenization of specific asset types is also attracting the attention of professional investors. At the end of October, the tokenized fund platform Elmnts, supported by oil and gas royalties, announced its public beta launch on Solana. Elmnts is a compliant investment fund tokenization platform. These funds are backed by revenue generated from companies extracting oil and gas on land owned by the funds. The platform currently primarily targets institutions and high-net-worth individuals.
In addition, participants in the DeFi space are also exploring more innovative paths by collaborating with traditional financial giants. Earlier this year, the DeFi protocol Ondo began utilizing BlackRock's USD institutional digital liquidity fund (BUIDL) to tokenize money market funds for its derivatives.
RWA Ecosystem Overview Source: Tren Finance
Regulatory clarity is expected to increase, bringing about the third revolution in asset management.
The global consulting firm Boston Consulting Group (BCG) referred to RWA tokenization as "the third revolution in asset management" in a paper released on October 29. Some argue that ETFs are the core of asset management 2.0, while tokenization could be the hallmark of asset management 3.0. BCG anticipates that within just seven years, the assets managed by tokenized funds may reach 1% of the global mutual fund and ETF managed assets, meaning that by 2030, managed assets will exceed $600 billion; this trend is expected to continue, especially as regulated on-chain currencies (such as regulated stablecoins, tokenized deposits, and CBDC projects) come to fruition.
According to Tren Finance's October report, the projections are even more aggressive, estimating that the size of the real-world asset (RWA) tokenization industry could exceed $30 trillion by 2030, with growth expected to surpass 50 times. Its rapid development is driven not only by flexible financial institutions and mainstream financial players but also by advancements in blockchain technology and progressively clearer regulations.
Against the backdrop of a sustained rise in the crypto market, the improvement in regulatory clarity has injected new confidence into the industry. Venture capital firm a16z Crypto pointed out in a recent official post aimed at crypto founders: "The good news is that there is now a way to engage constructively with regulators and legislators that can bring regulatory clarity, and you should all feel empowered to explore all breakthrough products and services supported by blockchain, including tokens."
The post specifically pointed out that token issuance is an activity that founders can feel more confident about: "For many of you, concerns about overregulation have led you to delay using tokens to allocate project control and build communities. Now you should feel more confident about using tokens as legitimate and compliant tools for your projects."
At the same time, Jesse Knutson, head of operations at Bitfinex Securities, stated that large financial institutions will be the main driving force behind significant growth in the tokenization industry. Knutson noted that institutions are already driving significant growth in the crypto industry, and this influence may further extend into the tokenization space.
The positive expectations for RWA tokenization have also received more responses from industry professionals. Larry Fink, CEO of BlackRock, the world's largest asset management company, recently stated, "The tokenization of financial assets will be the next step in future development." He pointed out that in the future, every stock and bond will have a unique identifier (similar to CUSIP), and all trades will be recorded on a unified ledger, granting investors exclusive identification. Fink stated that tokenization not only effectively prevents illegal activities but also enables instant settlement, significantly reducing the settlement costs of stocks and bonds. Additionally, tokenization will bring the possibility of personalized investment strategies and improve corporate governance efficiency, ensuring that every 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 representing ownership, making it easier to trade these traditionally hard-to-sell assets.
Specifically, according to a paper from State Street Global Advisors, bonds are expected to lead the large-scale adoption of tokenized real-world assets due to their structural characteristics. The report indicates that the bond market is mature and suitable for tokenization; the complexity of these instruments, the redundancy of issuance costs, and the intense competition among intermediaries support rapid adoption and create room for significant impact; blockchain technology can play an important role in markets that prioritize transaction speed (such as repos and swaps).
