What if I told you that the experts are wrong? Over the years, several prestigious consulting firms and financial institutions have published forecasts about the growth of tokenization by the end of the decade. It’s interesting how, amidst all that “expertise,” their ranges vary widely between $2 trillion (McKinsey) and $16 trillion (BCG). A $14 trillion spread certainly raises eyebrows!
Since 2017, asset tokenization has been trialed across the globe. We have witnessed nearly every asset class being brought on-chain. Presently, there is over $50 billion in tokenized stocks, bonds, and real estate, with some of the world’s largest financial institutions—including BlackRock, Franklin Templeton, and Apollo—beginning to invest significant resources into this domain. Adding to this, there are over $200 billion in stablecoins, which we can refer to as tokenized dollars, culminating in a quarter of a trillion dollars in Real World Assets (RWAs).
What will it look like when the faucet finally turns on? We believe it will transition from $250 billion today to $30 trillion by 2030, largely due to enhanced regulatory clarity surrounding cryptocurrencies in the U.S.
A Major Boon for America and the World
Whether it’s the Federal Reserve, the new Crypto Czar, both houses in Congress, or even the President, this administration has recognized and embraced the advantages of stablecoins in bolstering the dominance of the dollar globally.
If the U.S. dollar serves as the world’s reserve currency in the Web2 era, why should it not also extend its reach into the Web3 landscape? Simply put, the more individuals purchase stablecoins—predominantly dollar-backed—the better it is for the United States.
With a positive outlook on crypto, we anticipate market clarity regarding token classifications (an official taxonomy) and the structure of the stablecoin market through new legislation approaching Congress. The passage of such a bill could signal a green light for implementing blockchain within U.S. capital markets. Prior prediction reports did not consider this emerging clarity and the robust government-wide support for cryptocurrencies, stablecoins, and RWAs.
Stablecoins and yieldcoins (treasury-backed tokens) are poised to see substantial growth from their current valuation of $220 billion, potentially expanding to $3 to $5 trillion by 2030, factoring in commercial adoption, the expansion of digital assets, and the demand for yield on-chain.
This RWA utility has not only resonated with crypto users but is set to evolve into a settlement solution, providing payment infrastructure for capital markets at large. With blockchain technology, any asset can now transact in a near-instantaneous financial operating system, allowing seamless transitions between any tokenized RWA or crypto asset using stablecoins.
The tokenization revolution is inevitable—a sentiment echoed by the CEOs of BlackRock and JP Morgan, who have been overtly speaking and acting on this transformation.
Can Everything Be Tokenized?
Critics may scoff at the idea that over one hundred trillion dollars in stocks, hundreds of trillions in real estate, or trillions in commodities, bonds, and private companies could all be tokenized. Yet, in a few years, these skeptics may find themselves acknowledging tokenization as a necessity and the financial innovation of the century.
The answer is yes—it can all be tokenized.
The real question is not whether it can happen but how quickly each asset class will transition to on-chain solutions. Certain assets may feel a stronger impetus to adapt, while others are so substantial that even minor shifts could propel them into the trillions, whether through new asset issuance, tokenized asset growth, or the migration of legacy assets.
Conversations with banks, asset managers, crypto exchanges, and industry leaders reveal a renewed enthusiasm for asset tokenization. Traditional financial institutions and regulators now have a clearer understanding of the benefits of blockchain technology, suggesting that the growth of asset tokenization will occur at a quicker pace than previously anticipated.
Here are additional reasons our forecasts exceed earlier estimates:
Many past forecasts, such as those by HSBC and Northern Trust, employed methodologies calculating the asset class sizes and applying a nominal adoption percentage of about 5-10%. Others, such as Standard Chartered, suggested that specific asset classes might grow faster than others—citing that 14% of $30 trillion in assets by 2034 could come from trade finance. STM’s approach dissects the eight largest global asset classes, concurrently considering regulatory support as a pivotal factor for growth. For instance, if California’s title registry transitioned on-chain, this could potentially encompass a residential home market worth $10 trillion virtually overnight. With new market clarity in the U.S. and the success of stablecoins, we predict accelerated blockchain adoption worldwide, leading to $50 trillion in annual RWA trading by the end of the decade.
It’s time to open the faucet. Happy tokenizing!
Please refer to the full report here.
