Tokenized Asset Market Set to Explode 53% CAGR by 2033
Traditional finance is increasingly embracing blockchain innovation, with a particular focus on tokenized real-world assets and yield-generating stablecoins. A recent report by Ripple and Boston Consulting Group (BCG) projects that the tokenized asset market could reach $18.9 trillion by 2033. This forecast is driven by accelerating institutional adoption, evolving regulations, and maturing technology, suggesting that tokenization is approaching a significant tipping point.
The report outlines a middle-of-the-road scenario with an average compound annual growth rate (CAGR) of 53%, projecting a market size between $12 trillion and $23.4 trillion over the next eight years. This growth would transform traditional financial markets, introducing programmable money, 24/7 liquidity, and improved efficiency. Tokenization, the process of digitally representing ownership of real-world assets on a blockchain, is attracting major financial institutions seeking cost reductions and enhanced liquidity.
Early successes in tokenization include government bonds and US Treasuries, which are being used by corporate treasurers to manage idle cash in real time. Private credit and carbon markets are also identified as sectors ripe for disruption, offering transparent pricing and fractional ownership. However, the report highlights several barriers to widespread adoption, including fragmented infrastructure, limited interoperability, uneven regulatory progress, custody complexities, and smart contract fragmentation.
Despite these challenges, the report emphasizes the cost-saving potential of tokenization. Pilot projects can be launched for less than $2 million, while comprehensive platforms can cost up to $100 million for large-scale financial institutions. Tokenization can streamline processes like bond issuance, real estate fund tokenization, and collateral management, reducing administrative overhead and accelerating settlement timelines. However, the report warns that without industry-wide coordinated action, the same silos and fragmentation that tokenization seeks to eliminate could reemerge in digital form.
In related news, global asset manager Franklin Templeton has led an $8 million seed funding round into Cap, a blockchain startup developing a next-generation interest-bearing stablecoin and accompanying lending platform. The round also included backing from Susquehanna, Triton Capital, Nomura’s crypto arm Laser Digital, and market maker gsr. Cap’s offering, cUSD, is a stablecoin minted by depositing USDC or USDT, which can be staked to earn yield derived from real-world institutional borrowing. The protocol is architected around EigenLayer’s shared security model, allowing Cap to tap into Ethereum’s restaking ecosystem for both security and scalability.
Cap’s yield-bearing mechanics differ from legacy systems by outsourcing yield generation to a decentralized network of operators, creating a market-determined interest rate reflective of actual capital demand. Institutions like Franklin Templeton can become borrowers, tapping into Cap’s decentralized lending pool while offering yield to crypto-native lenders. The protocol charges a 10% fee on yield generated, with users retaining the rest. Additionally, Cap introduces loan insurance to ensure that depositors are repaid even in the case of borrower defaults.
While Cap’s architecture offers the promise of truly decentralized money markets, the team acknowledges the risks, including dependency on EigenLayer’s restaking mechanism, potential depegs of its cUSD stablecoin, bridge vulnerabilities, and inherent smart contract risks. These warnings are timely, especially as regulators in the US inch closer to comprehensive stablecoin legislation, which could soon face legal scrutiny depending on how forthcoming bills address yield-generating dollar-pegged assets.
