Bittime - Tokenized real-world assets (RWA) are a nascent sector in the financial world. This sector is predicted to experience rapid growth and reach its milestones in the next 2-5 years.
RWA Prediction by Expert
Carlos Domingo, founder and CEO of Securitize, the company that handles the redemption and placement of BlackRock's BUIDL Fund tokens, said that RWA is currently in its infancy, similar to the early development of the crypto world. Currently, the total value of RWA, including stablecoins, has only reached $200-$300 billion.
"When RWA reaches $1 trillion in blockchain, that's when tokenization becomes an important part of capital markets and financial services," Domingo said.
RWA's momentum is predicted to increase rapidly with BlackRock, a global asset management giant, entering the market through the BUIDL Fund, an Ethereum (ETH)-based fund.
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Impact of BlackRock and US Bond Tokenization
BlackRock's move into RWA through the BUIDL Fund has heated up the tokenized United States bond market. The total value of tokenized U.S. bonds reached $1 billion shortly after the BUIDL Fund's debut, according to Dune Analytics data.
Next Target: Credit
Domingo predicts that credit will be the next target in tokenization after US bonds and securities.
"Cash tokenization is first, followed by treasury bonds and money market funds. Credit will be the next target, offering lower liquidity but higher yields," Domingo said.
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RWA's Great Potential
Ondo Finance, a decentralized finance platform, agrees with Domingo. According to Ondo, tokenization of a fraction of US money market funds could turn the RWA sector beyond the market capitalization of Bitcoin (BTC).
The Cumberland report shows that total money market funds (AUM) at the start of 2023 will reach $8.4 trillion. If 1.5% of this AUM were converted into digital tokens, its value would surpass the stablecoin's current market cap.
If 7.5% of AUM is converted into digital tokens, its value will surpass Bitcoin's market capitalization.
Conclusion
The tokenization of real-world assets has great potential to transform capital markets and financial services. With more players, such as BlackRock, entering the market, RWA is predicted to reach the $1 trillion milestone in record time.
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Also Read:
Understanding the Role of Real World Asset (RWA) in Stablecoin Development
Real World Asset (RWA): A Brief History of RWA Tokenization You Must Know!
More about RWA: What are the advantages of asset tokenization?
DISCLAIMER: This article is informational in nature and does not constitute an offer or solicitation to sell and buy any crypto asset. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices may change significantly from time to time and Bittime is not responsible for fluctuations in crypto asset exchange rates.
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