Standard Chartered forecasts $30 trillion market for tokenized real assets by 2034
Date: 2024-07-05 Author: Gabriel Deangelo Categories: CRYPTO PAYMENTS
According to the latest report from Standard Chartered, the market size for tokenized real assets will reach an impressive $30.1 trillion by 2034. This forecast highlights the significant impact of tokenization on global trade and financial systems, helping to improve liquidity, accessibility and operational efficiency.
Shift to digital assets
The report highlights the trend of digital assets being integrated into mainstream financial systems, reflecting the widespread acceptance and scalability of blockchain technologies and decentralized financial applications (DeFi). Kai Fehr, head of international trading at Standard Chartered, said:
"The next three years will be a critical crossroads for tokenization, with trade finance assets coming to the fore as a new asset class. Unlocking this trillion-dollar opportunity will require collaboration between investors, financial institutions, governments and regulators."
Standard Chartered's analysis highlights that tokenization of trade finance assets could significantly reduce the global trade finance gap of $2.5 trillion. Tokenization allows fractional ownership, improves operational efficiency and financial market infrastructure, opening up new opportunities for investors.
Historical Milestones of Tokenization
The report highlights key milestones in the development of tokenization, starting with the emergence of Bitcoin in 2009 and Ethereum in 2015, which introduced smart contracts and decentralized applications into the financial ecosystem. Regulatory frameworks and industry initiatives such as Project Guardian in Singapore demonstrate the viability and benefits of tokenized assets.
Growing demand for tokenized assets
Standard Chartered predicts a significant increase in demand for tokenized assets, with 69% of buy-side companies planning to invest in them by 2024. This is driven by lower transaction costs, increased liquidity and access to new asset classes. The current market size for tokenized real assets is around $5 billion, excluding stablecoins, but the potential addressable market is estimated at $14 trillion.
Standard Chartered is actively involved in tokenization initiatives, such as the pilot of asset-backed security tokens on the Ethereum blockchain. These efforts highlight the practical application of tokenization to improve market access and operational efficiency.
The need for cooperation
The report calls for increased collaboration between financial institutions, regulators and technology providers to create an enabling environment for tokenization. Standardized processes, regulatory compliance and interoperability are important aspects.
The financial industry is on the cusp of significant change, and tokenization is poised to revolutionize asset management, trade finance, and global economic activity. Adopting tokenization will enable stakeholders to improve capital efficiency, expand market access and stimulate innovation, creating a more inclusive and sustainable financial ecosystem.
