A groundbreaking study anticipates the market for tokenized assets could explode to nearly $18.9 trillion within the next eight years, signaling a significant shift as major financial players embrace blockchain technology.
The analysis, jointly released by Ripple and Boston Consulting Group, outlines a potential ‘tipping point’ for the asset tokenization of real-world assets (RWAs). It suggests this sector is poised for massive expansion.
Projections indicate an impressive compound annual growth rate (CAGR) of approximately 53%. Starting from an estimated $600 billion market size in 2025, the value of tokenized assets could surge dramatically, potentially reaching the $18.9 trillion mark by 2033. Stablecoins and tokenized real estate are expected to be key drivers.
Several factors underpin this optimistic forecast. These include advancements in blockchain infrastructure capable of supporting enterprise-level operations, increasing regulatory clarity surrounding tokenized assets, and a growing interest from younger demographics favouring digital investments.
Laurent Marochini, CEO of Standard Chartered’s Luxembourg branch, noted the increasing adoption of tokenization within banks and financial institutions. He views it as a gateway to integrating traditional finance with new digital markets.
“Tokenization is advancing at different speeds across asset classes — fastest where it delivers real efficiencies and where conditions allow for secondary markets to emerge,” Marochini commented.
The study clarifies that its $18.9 trillion estimate excludes existing cryptocurrencies (which aren’t considered tokenized representations of other assets) and central bank digital currencies (CBDCs), as the latter may not rely on blockchain. Data limitations also led to the exclusion of markets like China and Russia.
Real estate represents a colossal segment ripe for tokenization, with an estimated underlying value exceeding $300 trillion. Other significant areas include investment-grade bonds (around $140 trillion) and global trade finance (over $10 trillion).
This forecast significantly surpasses earlier projections. For instance, a prior McKinsey report suggested the tokenized asset market might reach $2 trillion by 2030, highlighting the rapidly accelerating interest and development in this space.