The new trend embraced by Wall Street: Asset Tokenization
According to Standard Chartered Bank's forecast, by 2034, the market size of tokenized assets (transforming physical assets such as real estate and art into digital assets) will skyrocket from the current $13.2 billion to a staggering $30 trillion. It is worth mentioning that besides stocks and bonds, almost any asset can be tokenized
Wall Street's views have undergone a huge transformation in the past fifteen years. Initially rejected by Wall Street, cryptocurrencies are now embraced by major banks and financial institutions.
According to media reports on Wednesday, based on Standard Chartered Bank's forecast, by 2034, the market size of tokenized assets (converting physical assets such as real estate and art into digital assets) will skyrocket from the current $13.2 billion to a staggering $30 trillion. The market growth is mainly driven by private credit, reaching $8.4 billion, followed closely by U.S. Treasury bonds.
A McKinsey report states that by 2030, the market size of tokenized assets (excluding stablecoins) is expected to reach $20 trillion. This growth will be driven by its presence in various areas such as mutual funds, bonds, and alternative investment funds, reflecting the mainstream financial shift towards digital solutions.
It is worth mentioning that almost any asset can be tokenized besides stocks and bonds. The range of assets that can be represented by digital tokens is very wide, from houses and golf courses to exclusive club memberships and luxury goods. Notably, high-value collectibles such as art pieces and rare sneakers have also been tokenized, providing a secure way to verify authenticity in the secondary market.
The main driver behind this transformation is that blockchain technology can tokenize real-world assets like stocks, bonds, and even art pieces, converting these assets into digital tokens that can be traded quickly. For financial institutions, the appeal lies in cost efficiency and speed, making asset trading more accessible and efficient.
Some major players have already launched tokenized products. BlackRock introduced the first tokenized mutual fund in March, currently valued at over $500 million, indicating high market acceptance. Other financial giants such as J.P. Morgan and Goldman Sachs are exploring private blockchain solutions to enhance their services, showing a growing interest among financial institutions in tokenization