What happened?
The Skynet RWA Security Report projects that the tokenization of real-world assets (RWA) could expand to a $16 trillion market by 2030. This growth prediction is largely driven by the collaboration between institutional investors and decentralized finance (DeFi) platforms. The report also highlights the rapid increase in tokenized U.S. Treasuries, expected to reach $4.2 billion in 2025, particularly short-term government bonds.
Who does this affect?
This development impacts a broad range of stakeholders, including traditional financial institutions, DeFi platforms, and regulatory bodies. Major banks and asset managers are particularly interested in exploring tokenization to digitize various assets for better yield and liquidity management. It also affects regions like Hong Kong, Singapore, and the U.S., where regulatory frameworks are being developed to facilitate broader institutional participation.
Why does this matter?
The anticipated growth in RWA tokenization could significantly disrupt current financial markets, offering improved efficiency, transparency, and accessibility. This convergence of traditional finance and DeFi markets might attract both retail and institutional capital, enhancing liquidity and potentially introducing new risks. As the market expands, overcoming challenges like limited secondary market liquidity and cybersecurity vulnerabilities will be crucial for reaching the projected market size by the end of the decade.