Main Points
- Tokenized assets projected to reach a $2 trillion market size by 2030.
- Initial adoption will likely occur in regulated financial sectors.
- Key asset classes include bonds, ETFs, and mutual funds.
- Significant players driving growth include digital carbon markets and real
estate tokenization platforms.
Comprehensive Analysis
McKinsey’s Market Projection
According to a recent report by McKinsey & Company, the market for tokenized
financial assets is expected to reach approximately $2 trillion by 2030.
Although the initial adoption of tokenization has been slow, McKinsey
analysts anticipate substantial growth over the next several years. The
report highlights a potential bullish scenario where the market size could
double to around $4 trillion.
Tokenization Adoption Challenges
Despite the visible momentum, widespread adoption of tokenization faces
significant hurdles. One of the main challenges is the modernization of
existing financial infrastructure, especially in highly regulated sectors
such as financial services. McKinsey’s analysts identified several asset
classes, including cash and deposits, bonds and ETNs, investment funds,
ETFs, loans, and securitizations, as likely candidates for early
tokenization. They predict that the tokenization market for these assets
could reach $100 billion by 2030. However, this estimate does not include
stablecoins, tokenized deposits, or central bank digital currencies (CBDCs).
The Cold Start Problem
Tokenized assets face the “cold start problem,” where users need to
understand their value. Limited liquidity and concerns about losing market
share often hinder token issuance, leading to parallel issuance with
traditional systems. To overcome these challenges, tokenization must offer
clear benefits over traditional financial systems, such as improved
liquidity, faster settlement, and enhanced agility.
Use Cases and Benefits
One promising use case for tokenization is in the bond market. Despite the
issuance of billions of dollars in tokenized bonds, their advantages over
traditional issuances remain minimal, and secondary trading is still
limited. To promote further adoption, improving liquidity, speeding up
settlement processes, and enhancing the flexibility of tokenized assets are
crucial. Early adopters of tokenization stand to gain significant market
share, set industry standards, and shape the future of the sector.
Key Players in Tokenization
Several protocols are driving the growth of tokenized assets, particularly
in terms of active users. Digital carbon market platforms like Toucan and
Klima DAO, as well as real estate tokenization protocols such as Propy, have
seen significant user growth. In the U.S., high-yield tokenized government
bonds have also experienced substantial growth due to high inflation and
interest rates. Platforms like RWA.xyz have locked in $1.29 billion in
tokenized U.S. bonds and treasuries, marking an 80% increase since early
2024 Other contributing protocols include Securitize and Ondo.
Public and Private Blockchain Integration
Both public and private blockchains are incorporating various assets.
Notable examples include Franklin Templeton’s expansion of its U.S.
Government Money Fund from Stellar to Polygon, Backed Finance’s launch of a
tokenized short-term U.S. Treasury ETF, and UBS Asset Management’s
deployment of a tokenized money market fund on the Ethereum blockchain.
The projected growth of tokenized assets to a $2 trillion market by 2030
signifies a major shift in the financial landscape. While challenges remain,
the potential benefits of tokenization, including improved liquidity and
faster settlements, are driving interest and investment. Key players and
early adopters are likely to shape the future of this rapidly evolving
market, setting standards and paving the way for broader adoption.
