- The market for tokenized assets could reach $10 trillion in a "bull case" and $3.5 trillion in the "bear case," according to digital asset manager 21.co.
- Crypto is currently undergoing a maturation phase and increasingly integrating with existing financial plumbing.
- Regulatory restrictions and lack of standards pose challenges for widespread tokenization.
"The convergence between crypto and traditional asset classes, including fiat currencies, equities, government bonds, and real estate, is experiencing an unprecedented growth," read the report. "We estimate that the market value for tokenized assets will be between $3.5 trillion in the bear-case scenario and $10 trillion in the bull case by 2030."
Bank of America, for example, said in a report that tokenization could transform the existing financial infrastructure, increase efficiencies, reduce costs and optimize supply chains. A Boston Consulting Group report earlier this year estimated that the market for tokenized assets could mushroom to $16 trillion.
Crypto and TradFi converge via tokenization
Crypto is undergoing a maturation phase and more traditional institutions will use blockchains and build products on top of them, said the 21.co analysts. "Crypto is transitioning from frenzy to synergy," the report argues. "Through this transition, crypto will increasingly integrate with existing financial software and bring RWAs on-chain via tokenization."
Digital dollars – also known as dollar stablecoins, or cryptocurrencies pegged to USD – are the "first successful tokenization implementation," constituting 97% of all tokenized assets, the report said.
Despite the growth, regulatory restrictions, lack of standardized processes and socioeconomic circumstances such as low internet penetration are among factors that pose an obstacle to widespread, global accessibility of tokenized RWAs, 21.co said.
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