A series of new research reports from major traditional financial institutions predict the explosive growth of RWA (Real-world assets) and the tokenization of assets in the real world in the coming years.
Tokenization of real assets (RWA) is expected to experience a boom in growth over the next five years, with assets under management potentially reaching over $600 billion by 2030, according to several new research reports from major traditional financial institutions.
In a report on October 29, global consulting firm Boston Consulting Group called the tokenization of RWA the "third revolution in asset management".
"We are seeing an increasingly growing demand model from investors in the tokenized fund space," said David Chan, Managing Director and Partner at BCG.
The report, conducted in collaboration with Aptos Labs and Invesco, estimates that tokenized fund assets under management could reach 1% of the total assets under management of global mutual funds and ETFs within just seven years.
"This implies assets under management could surpass $600 billion by 2030," the researchers concluded.
"Going forward, we expect this trend to continue, especially as on-chain projects mature, such as stablecoin-pegged, tokenized deposits and central bank digital currencies (CBDCs) becoming a reality," Chan added.
Furthermore, the widespread adoption of tokenized real assets is expected to be led by bonds due to their structural characteristics that make them ideal for issuance on the blockchain, according to another report from State Street Global Advisors.
"The bond market is primed for adoption," the State Street researchers wrote in an October report on asset tokenization in the capital markets.
"The complexity of the instrument, the repeatability of issuance costs, and the high competition among intermediaries support both rapid adoption and ample space for significant impact," said Elliot Hentov, Head of Policy Research, and Macro Policy Strategist Vladimir Gorshkov.
They added that blockchain technology could play a crucial role in "speed-prioritized markets, such as repos and swaps".
The report explains that bonds, being fixed-maturity debt instruments, have three key characteristics that make them suitable for tokenization: reduced repeatability of costs through tokenization, complexity that can be automated through smart contracts, and the use of collateral that can be supported through on-chain transfers.
The report also notes that private equity funds have high transformation potential, while public equities have lower adoption potential as the current systems work well.
Tokenization of real estate and individual private equity faces significant challenges, and commodities offer potential for direct ownership but face legal barriers, the researchers said.
The Financial Stability Board (FSB) also issued a research report on asset tokenization this month. The report shares that the adoption of RWA tokenization is still low but growing, with the majority of tokenization being for government debt, followed by shares in debt funds, payment tokens, and commodities.
The industry analysis platform rwa.xyz noted the recent increase in research reports on RWA from institutions and asset managers in a post on X on October 29.
The platform shared that the total value of off-chain RWA is $13.25 billion, up 60% YTD.
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The article RWA sector could reach $600 billion in the next 5 years: BCG first appeared on CoinMoi.
