Tokenization of Assets Will Reach Trillions Sooner Than Expected

Imagine a scenario where expert predictions are proven wrong. For years, prominent consulting firms and financial institutions have made forecasts about the growth of tokenization by the end of the decade, with estimates ranging from $2 trillion to $16 trillion. This significant disparity highlights the uncertainty surrounding the industry. Since 2017, numerous trials have been conducted to tokenize assets worldwide, resulting in almost every asset class being brought on-chain. Currently, there are over $50 billion in tokenized stocks, bonds, and real estate, with major financial institutions like BlackRock, Franklin Templeton, and Apollo investing heavily in tokenization. Additionally, there are over $200 billion in stablecoins, which can be considered tokenized dollars, bringing the total to a quarter of a trillion dollars in Real-World Assets (RWAs). The question remains, what will happen when tokenization gains momentum? We believe it will lead to a significant increase from $250 billion today to $30 trillion by 2030, driven by the new crypto clarity in the U.S. This development is expected to greatly benefit America and the world. The current administration has demonstrated a clear understanding of the benefits of stablecoins in enhancing the dominance of the U.S. dollar in the global economy. As the world reserve currency for the Web2 world, the U.S. dollar is well-positioned to play a similar role in the Web3 world. The increasing adoption of stablecoins, mostly denominated in dollars, will further strengthen the U.S. economy. With the right attitude towards crypto, we can expect market clarity on token classifications and stablecoin market structure in upcoming legislation. This, in turn, will provide a green light for the use of blockchain in capital markets in the U.S. Previous prediction reports did not account for this new wave of clarity and government-wide support for crypto, stablecoins, and RWAs. Stablecoins and yieldcoins are poised to grow substantially from their current $220 billion position, potentially reaching $3 to $5 trillion by 2030, driven by commercial adoption, digital asset growth, and the demand for yield on-chain. This RWA use case has not only found product-market fit among crypto users but will also become a settlement solution and payment rail for capital markets in general. All assets can now transact on a new, nearly instantaneous financial operating system using blockchain to facilitate transactions in and out of any tokenized Real-World Asset (RWA) or crypto asset using stablecoins. The tokenization revolution is inevitable, a fact acknowledged by the CEOs of BlackRock and JP Morgan. While critics may argue that it is impossible to tokenize all assets, the answer is yes, it can be done. The question is how quickly each asset class will adapt to migrating on-chain. Some assets will face more pressure to adapt, while others will be driven by the need to innovate and stay competitive. Conversations with banks, asset managers, crypto exchanges, and industry leaders suggest a renewed enthusiasm for asset tokenization, driven by a better understanding of the benefits of blockchain technology among traditional finance sector players and regulators. This is expected to lead to faster growth in asset tokenization than previously forecast. Our forecasts are higher than previous estimates due to several factors, including the consideration of regulatory and government support as key drivers of growth. For instance, if California's title registry were to be put on a blockchain, it could tokenize a residential home market of $10 trillion virtually overnight. Thanks to the new market clarity in the U.S. and the success of stablecoins, we anticipate faster blockchain adoption worldwide, leading to $50 trillion in RWA annual trading by the end of the decade. It is time to accelerate tokenization. The full report can be found here.