Tokenization of Real-World Assets Gains Momentum, Predicted to Reach $16 Trillion Industry
In a recent article published by Cointelegraph, the process of tokenizing real-world assets (RWAs) has experienced a considerable surge in popularity. This trend encompasses a wide variety of assets, including real estate, digital art, and government bonds. It represents a notable shift from the initial enthusiasm, which had prompted some critics to doubt the potential of the tokenized RWA market. According to projections from Boston Consulting Group, the tokenization of illiquid assets worldwide is expected to develop into a $16 trillion industry by the close of this decade.
Recent data reveals that the total value of tokenized real-world assets surged to an all-time high of $2.75 billion in August. While it has slightly receded since then, it still maintains a substantial valuation of around $2.49 billion as of September 30.
A joint survey conducted by research and advisory firm Celent and banking giant BNY Mellon indicates that 91% of institutional investors are keen on investing in tokenized assets. An even higher percentage, 97%, believes that tokenization has the potential to revolutionize the field of asset management.
Matthijs de Vries, co-founder of AllianceBlock, a company dedicated to building a decentralized tokenized market, highlights the impact of institutional-grade investments on the industry. He suggests that this trend is expected to drive exponential growth in the tokenized RWA sector, especially as more liquidity enters the space. This, in turn, is likely to create a more sustainable bull market with reduced capital flight at its peak.
The growing interest in the tokenization of RWAs can be attributed to several factors, including improved regulatory clarity in specific regions, such as Switzerland, as well as successful pilot projects. Unsustainable yields in the decentralized finance (DeFi) sector, which contributed to the downfall of numerous major crypto projects in 2022, have driven investors to seek sustainable, real yields. Tokenized RWAs have become more attractive due to their transparent yield sources and increased recognition from traditional players.
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