Tokenized Real-World Assets Market Grows 37% in Q1, Reaches $18.5 Billion

Tokenized real-world assets (RWAs) are gaining traction, with the market currently standing at $18.5 billion, excluding stablecoins. The first quarter of this year saw a 37% growth in tokenized RWAs, despite a decline in asset prices. This growth is attributed to regulatory progress and the increasing market cap of stablecoins, which reached a new high.

Private credit and US Treasury debt are the largest segments within tokenized RWAs. BlackRock’s tokenized money market fund, BUIDL, has reached $2 billion in Assets Under Management (AUM). Expected legislation in the US that facilitates on-ramps and off-ramps is seen as crucial for the proliferation of stablecoins and tokenized Treasury products, which will serve as the foundation for more innovative onchain offerings in the coming years.

Experts predict that after stablecoins and money market funds, publicly listed US stocks will be the next easy access point for investors looking to move onchain. However, the next wave of growth could come from segments with a clear lack of transparency and settlement risk, such as private credit. There is also growing demand for tokenized private equity, with shares of private companies like SpaceX and OpenAI expected to be tokenized within the next four years.

Crypto custody firm Taurus estimates the market opportunity for fund tokenization at $1 trillion by 2030. While money market funds unlock use cases in collateral management, Taurus is also optimistic about tokenization within illiquid segments. Currently, selling a stake in a private equity fund with a lock-up period involves a manual process that can take weeks. Tokenization could streamline this process, making it more efficient and transparent.

While stablecoins and tokenized yield funds are expected to continue growing, it remains uncertain which other onchain segments will see significant traction next. However, there is a consensus among experts that meeting investors where they are is key. Investors want a single window where they can access crypto, stocks, and tokenized private credit, similar to the experience offered by platforms like Robinhood.