In decentralized finance, the forecast is bright for real-world asset (RWA) tokenization. On September 13, the renowned decentralized finance analyst Viktor DeFi’ boldly predicted that RWA tokenization would exceed $10 billion by 2024. This prediction reflects the growing momentum and interest in tangible assets brought into the blockchain world.
Real-world assets encompass physical assets that exist in the tangible world, with their ownership and transactions recorded on blockchain networks. Despite the extended bear market in the crypto world, RWA tokenization remains one of the hottest narratives.
According to research by Galaxy Research, the cumulative value of all tokenized real-world assets hit a new milestone in August, reaching a remarkable $3.1 billion. These assets span diverse sectors, including gold and precious metals, equities, money markets, carbon offsets, treasuries, real estate, and private credit.
The recent expansion of RWAs can be attributed to the rising demand for off-chain yield sources. A substantial portion of this expansion, approximately $1.44 billion, is in yield-bearing RWAs, constituting 87% of the $1.66 billion added to RWAs in the current year.
Breaking down the asset composition, gold and precious metals comprise about 37% of the total, while money markets and tokenized treasuries account for 23% and 20%, respectively. Notably, tokenized treasuries have experienced explosive growth, surging by approximately 450% since the start of 2023. Currently valued at $630 million, they have witnessed a plateau in growth since mid-June.
Recent developments within the RWA space include Centrifuge and Goldfinch, reaching all-time highs in active loan values. This achievement follows their alignment with the newly established Tokenized Asset Coalition (TAC), introduced on September 7. TAC comprises prominent members like Circle, Coinbase, Aave, and Goldfinch, with a collective mission to educate the industry, advocate for standardization, foster innovation, and jointly develop the necessary protocols and infrastructure for widespread adoption.
In related news, ANZ, one of Australia’s leading institutional banks, has successfully tested cross-chain transfers of tokenized assets using Chainlink technology. The bank lauded tokenized assets as transformative for the banking industry and emphasized their potential. ANZ collaborated with Chainlink Cross-Chain Interoperability Protocol (CCIP) to simulate the acquisition of a tokenized asset facilitated by a digital Aussie dollar (A$DC) and an ANZ-issued Z-dollar-denominated stablecoin. This test showcases the potential for financial institutions to leverage CCIP for seamless cross-chain transactions across both public and private blockchains.
As RWA tokenization continues gaining momentum and adoption, it is poised to reshape the landscape of decentralized finance, offering new opportunities and possibilities for investors and the broader financial industry. With continued innovation and collaboration, the journey toward a $10 billion RWA tokenization market by 2024 appears increasingly attainable.