- Real-world asset tokenisation is the process of converting an off-chain product – cash, bonds, stocks, music, a water bottle and so on – into a token that can be traded via the blockchain.
- This industry has blossomed to be worth US ~$180b, largely on the back of stablecoins representing USD.
- However, according to a report from Tren Finance, this valuation is nothing compared to the trillion-dollar industry tokenisation will become by the end of 2030.
- British international banking giants Standard Chartered believe the baseline market cap for RWAs at the end of the decade will be US $30 trillion.
Real-world assets (RWA) are one of the most exciting applications of blockchain technology both among the DeFi and TradFi spaces. Adoption of RWAs has already ramped up in 2024, with big-name institutions like BlackRock and Franklin Templeton releasing on-chain investments based on traditional bonds and US Treasury notes.
Meanwhile, banks worldwide continue experimenting with central bank digital currencies (CBDCs), as money managers look for ways to optimise international and high-volume settlements.
The potential for RWAs hardly stops there, with possibilities like streamlining real estate sales, improving supply chain integrity and fractionalising illiquid assets all future prospects.
And, according to a recent report from Tren Finance, all of this potential may be coming to a head by the end of this decade.
Related: Grayscale Moves to Convert Multi-Token Fund into ETF, Aiming for NYSE Listing
RWA Market Barely Scratching the Surface, According to Chainlink
The analysis involved interviewing several major FinTech institutions and asking about their internal bullish and bearish case outcomes for the RWA industry by 2030.
According to Chainlink, heavy-hitters in the sector, the current RWA market is “only” worth about US $187b (AU $280b). This figure even includes stablecoins, which drive the majority of the market cap (about US $170b).
In the same graphic, Chainlink claims that the total addressable market for RWA tokenisation as it stands is a whopping US $867 trillion (which is over one quadrillion Australian Dollars).
There’s a huge gap between those two numbers and it will take longer than 5-6 years to bridge it. However, according to the institutions questioned for Tren Finance’s report, it may be closing faster than we think.
Tokenisation Will Become a US $30T Market, Says Standard Chartered
Not a single financial company consulted for the tokenisation analysis believes the industry will be worth less than US $2 trillion (AU $3 trillion) by 2030. So, in the “bearish case” for companies like McKinsey and Citigroup, the RWA market will increase by at least 969% over the next half-decade.
In the best-case scenario? International banking firm Standard Chartered foresees the RWA market exploding to a valuation of over US $30 trillion (AU $45 trillion), while more conservative forecasts still predict a cap of US $10 trillion (AU $15 trillion) or higher.
Real-world asset tokenisation is the process of taking something off-chain and creating a token that represents it on a distributed ledger. The most basic form of RWAs is stablecoins, which are simply the digital representation of fiat currencies or other assets.
Related: Swyftx Reveals OTC Insights: PEPE a Top Traded Asset Among High Volume Investors
Tokenisation has the power to combine traditional financial products with the benefits of the blockchain, including faster and cheaper processing times, avoidance of third-party fees or censorship and improvement of liquidity.
It’s no wonder businesses are clamouring over one another to get on the ground floor.
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