$1.3T in Tokenized RWAs by 2030 More Likely Than $30T

August 28, 2024 05:28 PM AEST | By Team Kalkine Media

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A recent Wall Street forecast suggesting that tokenized real-world assets (RWAs) could reach a value of $30 trillion by 2030 has been met with skepticism. Jamie Coutts, Chief {Crypto} at Real Vision, has voiced doubts about the feasibility of this projection. He proposes a more conservative estimate, suggesting that if the current compound annual growth rate (CAGR) of 121% persists, the tokenized RWA market might be closer to $1.3 trillion by 2030.

Tokenization involves creating security tokens on a blockchain that represent real-world assets, such as real estate, bonds, art, and stocks. This process aims to enhance the liquidity and accessibility of traditional assets through blockchain technology.

In June, Standard Chartered Bank and Synpulse projected that the tokenized RWA market could reach $30.1 trillion by 2034. While Coutts acknowledges that this forecast may be overly optimistic, he still sees l for significant impact. A market size of $1.3 trillion in tokenized RWAs could create a substantial “flywheel effect” on the broader crypto ecosystem, benefiting areas such as non-fungible tokens (NFTs), social platforms, and gaming.

The implications for Ethereum, a leading platform for early tokenization efforts, are complex. Coutts highlights the challenge of assessing value accrual on Ethereum due to competition from layer-2 networks. The distribution of market share between Ethereum's base layer and its layer-2 solutions will influence the overall impact on Ethereum’s ecosystem.

McKinsey & Company’s report from June suggests that while tokenized financial assets have had a slow start, they are projected to grow to a market size of approximately $2 trillion by 2030. The firm points out that tokenization needs to demonstrate clear advantages over traditional finance systems to gain widespread adoption. One promising application is the tokenization of bonds, with frequent announcements of new tokenized bond issuances indicating growing interest.

RippleX Senior Vice President Markus Infanger has mentioned that some research estimates the future value of tokenized markets could be around $16 trillion, highlighting the substantial compared to the current cryptocurrency market capitalization.

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