Tokenization of real-world assets poised for rapid growth, report finds

Economics
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The market value of tokenized assets is projected to surpass $10 trillion by 2030 | Globe Banner

A report by Roland Berger in October 2023 announced the market value of tokenized assets is projected to surpass $10 trillion by 2030, signaling significant growth and adoption.

Tokenization refers to the process of converting tangible and intangible assets—such as real estate, art, commodities, and infrastructure projects—into digital tokens on blockchain platforms. This approach allows for fractional ownership, increased liquidity, and broader accessibility to traditionally illiquid assets. While the technology is still emerging and faces challenges, experts believe it has the potential to transform asset ownership and investment. 

London based blockchain development company Interexy says the benefits of tokenizing real-world assets include increased liquidity, enhanced accessibility, portfolio diversification, cost efficiency, transparency, security, and economic empowerment. Tokenization enables fractional ownership, making it easier for investors to access and trade traditionally illiquid assets like real estate, art, and commodities. 

The process can reduce administrative costs and improve the security and transparency of transactions through blockchain technology. However, the nascent nature of the technology presents challenges, requiring investors and market participants to remain adaptable and informed about emerging trends.

The tokenization of real-world assets could also significantly impact traditional financial markets by enabling fractional ownership and increasing liquidity, according to Interexy, potentially attracting a broader range of investors, including those previously unable to afford high-value assets. This democratization of investment opportunities could contribute to a more inclusive financial system. 

Additionally, blockchain technology’s enhanced transparency and security could reduce fraud and boost trust in financial transactions. However, integrating tokenized assets into traditional markets may pose regulatory challenges and necessitate considerable adjustments in market infrastructure and practices.

Roland Berger asserts that as the technology develops, it is imperative for regulatory bodies to establish clear guidelines to protect investors and maintain the integrity of financial markets. Effective regulation can help mitigate risks such as fraud, money laundering, and market manipulation. 

Compliance with these regulations is essential for fostering market trust and stability, which can encourage broader adoption of tokenized assets, Roland Berger reports. Furthermore, a well-defined regulatory environment can provide legal clarity and support innovation, enabling market participants to navigate the complexities of tokenization with confidence.