Market

The market for tokenization of RWAs is poised for significant expansion. Value of U.S. treasury assets on public blockchains has recently surpassed $650 million and continues to grow at a healthy clip. In the near-term, tokenization of financial and real-world assets is projected to reach up to $5 trillion, with notable growth in private markets and the repo, securities financing, and collateral markets. Ultimately, the long term potential value of assets to be tokenized is massive: from the $250 trillion global capital markets to the $300 trillion-plus global real estate market. Currently valued at approximately $300 billion, the total addressable market (TAM) for RWA tokenization is estimated to reach $16 trillion by the end of the decade and is attracting the eye of major institutional participants.

This growth is driven by the increasing integration of blockchain technology across various sectors, enabling the digital representation of physical assets ranging from real estate and art to corporate bonds and other financial instruments​​.

Forecasted market growth from 2023 to 2030

Key Trends

• Increasing Institutional Adoption: Major financial institutions and asset managers are progressively exploring and integrating tokenization to enhance liquidity, efficiency, and transparency in asset management. This trend is bolstered by innovations in blockchain technology that make these transformations more accessible and secure​​.

• Regulatory Evolution: As tokenization gains traction, regulatory frameworks are evolving to accommodate these changes, providing clearer guidelines and increasing investor confidence. This regulatory progression is crucial for the adoption and growth of tokenized assets​​.

• Technological Advancements: Improvements in blockchain infrastructures, such as enhanced security features and the development of more robust platforms capable of handling complex transactions, are making tokenization more viable for a broader range of assets. This technological evolution is not only improving the functionality of tokenized assets but also broadening their appeal to a wider market​​.

• Diversification of Tokenized Assets: Initially focused on high-value assets like real estate and art, the scope of tokenization is expanding to include a wider array of assets, including debt instruments, commodities, and even intellectual property. This diversification is significantly broadening the market for potential investors and uses of tokenized assets​​.

• Growth in DeFi Applications: DeFi platforms are increasingly incorporating RWAs as a means of securing loans and other financial products, further integrating traditional financial markets with blockchain technology. This integration is expected to enhance liquidity and open new avenues for investment and capital deployment​​.

Forecasted market growth from 2023 to 2030. Source: SIFMA, Preqi, Savills, Finadium, and Valuates

Overall, the market for RWA tokenization is on a robust growth trajectory, driven by technological advancements, regulatory developments, and increasing market acceptance. As this market matures, it will likely transform numerous aspects of asset trading and management, making investments more accessible and markets more efficient.