Banks to Fuel Trillion-Dollar Tokenization Boom

Some predict that the real-world asset tokenization market, which agile and well-known financial institutions fuel, could surpass $30 trillion by 2030.

Financial institutions will be the primary forces behind the expanding tokenization market until 2030—when it may have grown by more than 50 times—.

Increasing investor accessibility and trading prospects around financial and other tangible assets created on the immutable blockchain ledger is known as “real-world asset” (RWA) tokenization.

According to Jesse Knutson, head of operations at Bitfinex Securities, large financial institutions will drive significant growth in the tokenization industry.

During an exclusive at Plan B Lugano, Knutson said that institutions are already propelling the crypto industry’s notable expansion, which may have repercussions for the tokenization space.

“It’s the more nimble institutions, the fast movers, like the family offices, those kind of guys. I think they’ll have an outsized impact in these early days. But eventually, the benefits of tokenization, they’re going to pull in the mainstream institutional investors

By 2030, the RWA industry might grow by more than 50 times, potentially reaching over $30 trillion, according to some of the world’s most significant financial institutions and business consultancy organizations.

Tokenized securities: an opportunity worth trillions of dollars

Most businesses estimate that 2030 the RWA market will be worth between $4 trillion and $30 trillion.

According to a Tren Finance research analysis, the sector’s current worth of about $185 billion, including the stablecoin market, would have grown more than 54 times if it were to reach the median projection of almost $10 trillion.

As of October 2024, stablecoins still dominate the RWA industry, controlling more than $170 billion of the market. By contrast, onchain tokenized assets and treasuries are worth $2.2 billion.

The RWA sector will grow in tandem with the cryptocurrency industry: Bitfinex.

After obtaining a major institutional endorsement in the form of the first spot Bitcoin exchange-traded funds (ETFs) in the US, Bitcoin BTC$89,651 saw significant gains this year, increasing by over 116% year-to-date.

According to Knutson of Bitfinex Securities, the RWA tokenization market will probably follow the cryptocurrency space’s growth trajectory:

“The consensus view is that markets are going to evolve, and the direction they’re probably going to evolve is, is something similar to how the digital asset industry has grown over the years.”

More and more organizations, including BlackRock, the world’s most significant asset management company, are placing bets on the RWA sector’s success. UBS Asset Management is one of several financial companies conducting tokenization experiments.