Tokenized Asset Market Projected to Reach $18.9 Trillion by 2033
The market for tokenized financial instruments, or real-world assets (RWAs), is projected to reach $18.9 trillion by 2033, representing a 53% compound annual growth rate (CAGR). This forecast is based on a report from Boston Consulting Group and Ripple, with estimates ranging from $12 trillion to $23.4 trillion.
Key points include:
- Tokenization uses blockchain to record ownership and transfer assets like securities and real estate.
- JPMorgan’s Kinexys platform has processed over $1.5 trillion in tokenized transactions.
- BlackRock’s tokenized U.S. dollar money market fund nears $2 billion in assets under management.
- Tokenization enhances efficiency, faster settlements, and around-the-clock transactions.
Challenges to Adoption
- Five barriers identified: fragmented infrastructure, limited interoperability, uneven regulatory progress, inconsistent custody frameworks, and lack of smart contract standardization.
- Regulatory clarity varies by region; some have established frameworks while others remain restrictive.
- Most firms are in the early phases of adoption, focusing on low-risk instruments.
- Tokenization projects are becoming more affordable, launching for under $2 million.
- Coordinated industry action is necessary to avoid reemergence of fragmentation.