Forecast for Tokenized Assets
A recently released study from Ripple in collaboration with Boston Consulting Group has forecasted that the market for tokenized assets may soar to an astounding $18.9 trillion within the next eight years, driven by the increasing adoption of blockchain technology by leading financial institutions. The insightful report, titled “Approaching the Tokenization Tipping Point,” reveals that the tokenization of tangible assets is on a path of remarkable growth, with an anticipated compound annual growth rate of 53%. Notably, stablecoins and real estate are expected to be significant contributors to this expansion.
Market Predictions and Growth Factors
By 2025, the projected market value for tokenized assets is expected to reach approximately $600 billion, setting the stage for this tremendous forecast of $18.9 trillion. The report identifies several critical factors fueling this rapid advancement, including enhancements in blockchain capabilities suitable for large enterprises, increased regulatory clarity surrounding tokenized assets, and a growing interest from younger investors who are increasingly turning to digital assets.
Expert Insights
Laurent Marochini, CEO of Standard Chartered’s Luxembourg division, has remarked on the potential for tokenization, particularly within the banking sector. He emphasizes the transformative opportunities that exist across various markets, stating:
“Tokenization is advancing at different speeds across asset classes — fastest where it delivers real efficiencies and where conditions allow for secondary markets to emerge.”
Clarification on Market Values
To clarify the figures presented, it is important to note that the projected $18.9 trillion market value does not encompass cryptocurrencies, which are not classified as tokenized assets. Additionally, central bank digital currencies are excluded due to their lack of necessity for blockchain integration. Furthermore, market data from China and Russia is not included in this analysis due to limited access.
Real Estate and Other Significant Segments
Real estate stands out as one of the most significant segments poised for tokenization, with a current valuation exceeding $300 trillion. Investment-grade bonds sit around $140 trillion, while global trade finance surpasses $10 trillion. Comparatively, an earlier report from McKinsey had suggested a more conservative estimation, projecting the tokenized market cap could reach $2 trillion by 2030. This previous estimate reflected the growing participation of new market players such as Coinbase Asset Management and Glasstower, along with Ripple itself, which are anticipated to enter the space in 2025.
