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"Wall Street Bets Big on $30T RWA Tokenization by 2030"
AInvestSaturday, Feb 1, 2025 11:23 am ET
1min read
FISI --
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Wall Street is increasingly betting on the prospects of the real-world asset (RWA) tokenization market, which is projected to reach $30 trillion by 2030. This emerging trend has gained significant momentum in 2024, with almost every tokenized asset class experiencing remarkable growth. Tokenized Treasurys surged by 179%, while private credit grew by 40%, and the overall market cap of these assets increased by 32%, outpacing the growth of the broader crypto market.

Global investment giant VanEck forecasts that the RWA market will surpass $50 billion by the end of this year, indicating a clear momentum behind this trend. Traditional financial institutions, such as JPMorgan, UBS, BlackRock, Citi, and Goldman Sachs, are moving beyond theoretical interest and implementing blockchain technology on a large scale. This shift is fundamentally transforming how real-world assets are managed, traded, accessed, and used across various industries and regions. Tokenized Treasurys alone saw explosive growth in 2024, rising from $769 million at the start of the year to over $2.2 billion by September.

Institutions are betting on tokenization for several reasons. Firstly, it brings transparency to opaque markets, such as asset-backed securities (ABSs), by creating a clear, immutable record of ownership and transactions. This reduces risks and enhances trust, qualities that traditional financial markets often struggle to deliver. Secondly, tokenization simplifies transactions and lowers barriers to entry, making it easier for investors to participate, especially those previously excluded by high barriers to entry. Franklin Templeton's Franklin OnChain US Government Money Fund (FOBXX) is an example of this approach.

Blockchain technology has matured significantly in recent years, addressing early skepticism around scalability and security. Enterprise-grade platforms like JPMorgan's Onyx and Securitize provide the infrastructure to tokenize and trade RWAs efficiently and securely. Additionally, institutional demand for liquidity is growing, with products like the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) and Franklin Templeton's Benji gaining popularity. These tokenized funds offer the same functionality as traditional money market funds while adding the benefits of blockchain, such as reduced settlement times and easier integration with decentralized finance platforms.

Governments and regulators are beginning to recognize the potential of tokenization, with thoughtful

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.