Tether has announced the launch of the asset tokenization platform Hadron, while Visa also released the tokenized asset issuance and management platform VTAP in early October. Against the backdrop of gradually clarifying regulatory policies, the industry's optimism about the future of tokenization is also increasing.
Author: Weilin, PANews
Recently, with Trump's victory in the US election, the crypto market has been heating up, and the RWA track has been seeing new dynamics. For example, on November 14, Tether announced the launch of the asset tokenization platform Hadron by Tether, while Visa also released the tokenized asset issuance and management platform Visa Tokenized Asset Platform (VTAP) in early October.
Against the backdrop of gradually clarifying regulatory policies, the industry's optimism about the future of tokenization is also increasing. Jesse Knutson, the head of operations at Bitfinex Securities, recently pointed out that large financial institutions will be the main driving force for the growth of the tokenization industry. BlackRock CEO Larry Fink even sees the tokenization of financial assets as "the next step in the future development".
Tether, Visa and other giants and platforms are competing for layout, launching tokenization platforms
The core idea of RWA tokenization is to mint financial assets and other tangible assets onto the immutable blockchain ledger, thereby increasing the accessibility of investors, enhancing the liquidity of these assets, creating more trading opportunities, while saving transaction costs and improving security.
According to data from rwa.xyz, as of November 18, the top 5 issuers (excluding stablecoins) in the RWA track by Total Value are BlackRock ($542 million), Paxos ($506 million), Tether ($501 million), Ondo ($452 million), and Franklin Templeton ($410 million).
The RWA track is heating up as the overall crypto market is rising. On November 14, Tether, the issuer of the stablecoin USDT, announced the launch of the asset tokenization platform Hadron by Tether, which can simplify the process of converting various assets into digital tokens. The platform allows users to easily tokenize stocks, bonds, commodities, funds and reward points. According to the official introduction, Hadron aims to open up new opportunities for individuals, businesses, and even nation-states to raise funds using tokenized collateral. Hadroon not only provides risk control, asset issuance and destruction, KYC and anti-money laundering compliance guidance, but also supports blockchain reporting and capital market management.
Technologically, Hadron supports Ethereum, Avalanche and Blockstream's Bitcoin scaling network Liquid, and will soon add the TON network and other smart contract chains.
At the same time, giants in the traditional finance sector are not far behind. On October 3, Visa launched the Visa Tokenized Asset Platform (VTAP), aimed at simplifying the issuance and management of tokenized assets, including tokenized deposits, stablecoins and central bank digital currencies (CBDCs). Through VTAP, financial institutions can use the sandbox environment provided by the Visa Developer Platform to create and test their own fiat-backed tokens.
At the same time as providing support to institutions, some projects have also begun to focus on the potential of the retail market. On October 8, the EU token protocol Midas opened up the mTBILL and mBASIS tokens to retail traders, reportedly having obtained regulatory approval from the Liechtenstein Financial Market Authority to offer these funds to retail traders, making Midas' real-world asset (RWA) tokens the only regulated crypto instrument in Europe not subject to the $100,000 minimum investment limit.
On the other hand, the tokenization of specific asset types is also attracting the attention of professional investors. At the end of October, the tokenized fund platform Elmnts, backed by oil and gas concessions, announced its public testnet launch on Solana. Elmnts is a compliant investment fund tokenization platform. These funds are supported by royalties, i.e., revenue generated by companies extracting oil and gas on the land owned by the fund. The platform currently mainly serves institutions and high-net-worth individuals.
In addition, DeFi participants are also exploring more innovative paths through collaboration with traditional financial giants. Earlier this year, the DeFi protocol Ondo also began utilizing the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) token to develop its derivative products.
Regulation is expected to become clearer, and the third revolution of asset management is coming
In an October 29 paper, global consulting firm Boston Consulting Group (BCG) referred to RWA tokenization as the "third revolution of asset management." It is believed that while ETFs are the core of asset management 2.0, tokenization may be the era of asset management 3.0. BCG predicts that within just seven years, tokenized fund assets under management could reach 1% of global mutual fund and ETF assets, meaning over $600 billion by 2030; this trend is expected to continue, especially as regulated on-chain currencies (such as regulated stablecoins, tokenized deposits, and CBDCs) projects materialize.
The forecast from the Tren Finance October report is even more aggressive, predicting that the real-world asset (RWA) tokenization industry could exceed $30 trillion by 2030, a growth of over 50 times. Behind its rapid development are not only the flexibility of financial institutions and the push of mainstream financial institutions, but also the support of blockchain technology progress and the gradual clarity of regulation.
Against the backdrop of the continued rise in the crypto market, the improvement in regulatory clarity has injected new confidence into the industry. In a recent blog post on its website, venture capital firm a16z Crypto pointed out to crypto founders that "the good news is there is now a path to engage constructively with regulators and policymakers to bring regulatory clarity, and you should all feel empowered to explore all the breakthrough products and services that blockchain can support, including tokens."
The post specifically noted that token issuance is an activity that founders can have more confidence in: "For many of you, you've held back on using tokens to distribute project governance and build community, due to concerns about over-regulation, and now you should feel more confident in using tokens as a legitimate, compliant tool for your projects."
Meanwhile, Bitfinex Securities' Head of Operations Jesse Knutson stated that large financial institutions will be a significant driver of growth in the tokenization industry. Knutson said that institutions have already been driving significant growth in the crypto industry, and this influence may extend further into the tokenization space.
The positive outlook for RWA tokenization has also been echoed by more industry professionals. Larry Fink, CEO of the world's largest asset manager BlackRock, recently stated that "the tokenization of financial assets will be the next step in the evolution." He pointed out that in the future, every stock and bond will have a unique identifier (similar to a CUSIP), with all transactions recorded on a unified ledger, and investors will also have their own unique identities. Fink said that tokenization not only can effectively prevent illegal activities, but more importantly, it can achieve instant settlement, significantly reducing the settlement costs of stocks and bonds. Furthermore, tokenization will also enable personalized investment strategies and improve corporate governance efficiency, ensuring that every shareholder can exercise their voting rights in a timely and accurate manner. Tokenizing real-world assets such as real estate, commodities, wine, or art means creating blockchain tokens representing ownership, making these traditionally illiquid assets more easily tradable.
Specifically, according to a paper by State Street Global Advisors, bonds are expected to lead the large-scale adoption of tokenized real-world assets due to their structural characteristics. The report states that the bond market is mature and suitable for tokenization; the complexity of these instruments, the repetitive nature of issuance costs, and the high level of competition between intermediaries both support rapid adoption and provide room for significant impact; blockchain technology can play an important role in markets that prioritize transaction speed (such as repos and swaps).
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