Token adoption grows as real-world assets move on-chain
While critics wrote off much of the initial hype surrounding the tokenized real-world asset (RWA) market, the sector has been on a tear over the past year or so. In fact, Boston Consulting Group expects the tokenization of global illiquid assets to be a $16 trillion industry by the end of the decade.
A variety of asset categories are actively being tokenized and garnering investments, with recent data suggesting that the total value of tokenized real-world assets reached an all-time high of $2.75 billion in August. And while the metric has slipped since then, it still stands at around a respectable $2.49 billion as of Sept. 30.
As per a joint survey by research and advisory firm Celent and American banking behemoth BNY Mellon, 91% of institutional investors are interested in putting their money into tokenized assets, with 97% agreeing that tokenization stands to revolutionize the realm of asset management.
Matthijs de Vries, co-founder of AllianceBlock — a firm building a decentralized tokenized market — told Cointelegraph that these types of statistics give a glimpse into the impact that institutional-grade investments have on the industry.
“This trend is expected to result in exponential growth in the tokenized RWA industry, particularly as more liquidity flows into the space. This will lead to a more sustainable bull market with less capital flight at its peak,” he added.
From the outside looking in, the tokenization of RWAs seems to be gaining momentum due to improved regulatory clarity in specific jurisdictions (such as Switzerland) and successful pilot projects.
De Vries said the unsustainable yields in decentralized finance (DeFi), which led to the collapse of many major crypto projects in 2022, have prompted
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