A recent report on tokenization from the Boston Consulting Group (BCG) said the process "enables borderless accessibility" to physical assets for investors all over the globe.
"On-chain asset tokenization enables borderless accessibility by enabling listing of hitherto illiquid assets (e.g., natural resources, land, vintage paintings) subject to local regulations in each jurisdiction, and enabling seamless trading in the secondary market," the report said as one of the six advantages of tokenization over traditional fractionalization.
This borderless accessibility means investors from around the world can participate in secondary markets, buying and selling their tokens in real-time, creating a dynamic and fluid market for previously illiquid assets.
“The asset becomes liquid, it becomes tradable 24/7, and a global pool of investors have access to it,” said Max Dilendorf, a digital assets lawyer.
In addition to improved affordability and accessibility, tokenization also offers operational efficiency through automation, faster settlement times, enhanced data security, and greater liquidity in markets where liquidity was previously limited. "Real estate is a very emotional asset class," said Jerry Chu, a leader in the tokenized real estate space. “People seem to be a lot happier about ownership when they can say, 'It’s this address, I own it because of these reasons.'"
With tokenization, assets such as land, vintage paintings, and natural resources can be listed and traded globally, expanding opportunities for investors seeking alternative investments. The ability to engage in borderless trading of these assets through decentralized platforms breaks down the traditional barriers of geography, time zones, and complicated regulatory processes.
As the tokenized asset market is expected to grow from $1.5 trillion to $16.1 trillion by 2030, as projected by BCG 2023.
According to a 2023 BCG report, real estate tokenization alone could contribute up to $3.2 trillion to this total. By providing enhanced liquidity, streamlined operations, and borderless accessibility, tokenization is revolutionizing the way investors interact with high-value assets, making global markets more inclusive than ever before.
According to a White House statement, in May 2023, the U.S. Government announced a significant investment of USD 220 billion in 32,000 infrastructure projects across 4,500 communities.