Standard Chartered recently released a report projecting that the market for tokenized real-world assets is expected to grow to $30.1 trillion by the year 2034. This growth is significant and demonstrates the increasing importance of tokenization in transforming global trade and finance. Tokenization plays a key role in enhancing liquidity, accessibility, and efficiency in the financial market.
The report highlights the shift towards integrating digital assets into mainstream finance, showcasing the broader adoption and scalability of blockchain technology and DeFi applications. Kai Fehr, the Global Head of Trade at Standard Chartered, emphasized the importance of industry-wide collaboration to unlock the trillion-dollar opportunity presented by tokenizing trade finance assets.
Tokenization allows for fractional ownership, operational efficiency, and improved financial market infrastructure. This, in turn, opens up new opportunities for investors and helps bridge the $2.5 trillion global trade finance gap. The evolution of tokenization has been rapid, with milestones like the introduction of Bitcoin in 2009 and Ethereum in 2015 paving the way for smart contracts and decentralized applications in the financial ecosystem.
As the market for tokenized assets expands, the demand is expected to increase significantly. Standard Chartered predicts that 69% of buy-side firms plan to invest in tokenized assets by 2024. This growing interest is driven by the potential for reduced transaction costs, enhanced liquidity, and access to new asset classes.
While the current market size of tokenized real-world assets is around $5 billion, the potential addressable market, including trade finance gaps, is estimated to be $14 trillion. Standard Chartered has already made significant strides in this area, successfully piloting asset-backed security tokens on the Ethereum blockchain.
The report concludes by emphasizing the need for increased collaboration among financial institutions, regulators, and technology providers to create a supportive environment for tokenization. By embracing tokenization, stakeholders can enhance capital efficiency, broaden market access, and drive innovation, ultimately leading to a more inclusive and resilient financial ecosystem.
In summary, the projected growth of the tokenized real-world asset market to $30.1 trillion by 2034 represents a significant opportunity for the financial industry. By leveraging the benefits of tokenization, stakeholders can revolutionize asset management, trade finance, and global economic activities, paving the way for a more efficient and innovative financial landscape.