Boston Consulting Group has identified the tokenization of real-world assets (RWA) as a groundbreaking development in asset management, predicting that this innovation could lead to managing assets worth up to $600 billion by 2030.
In a report released on October 29, the renowned global consulting firm, Boston Consulting Group (BCG), referred to RWA tokenization as “the third revolution in asset management.” Collaborating with Aptos Labs and Invesco, BCG forecasts that tokenized assets could make up 1% of all global mutual funds and exchange-traded funds (ETFs) within the next seven years.
Managing Director and Partner at BCG, David Chan, noted a growing trend in investor demand for tokenized funds. The report suggests that the RWA tokenization market could potentially expand by up to 50 times by the end of the decade. This surge is attributed to the increasing availability of regulated on-chain currencies like stablecoins, tokenized deposits, and central bank digital currencies (CBDCs).
State Street Global Advisors, a prominent player in asset management, also highlighted the potential of RWA tokenization in an October report, focusing on the bond market as a prime candidate for blockchain adoption. The report indicates that bonds possess characteristics that make them suitable for tokenization, such as recurring issuance costs, complex structures that can benefit from smart contract automation, and a need for efficient collateral transfers.
Beyond bonds, assets like private equity also show promise for tokenization, while public equities may face fewer incentives due to existing efficient systems. Real estate and private equity, however, present challenges due to complex regulations and technological infrastructure requirements.
Despite slow adoption rates, the RWA tokenization sector is growing, with initiatives primarily seen in government debt, equity stakes, and commodities. As of October, the value of tokenized RWAs has reached $13.25 billion, marking a 60% increase this year. Forecasts from various sources suggest significant growth potential for the RWA tokenization market, with estimates ranging from a 50-fold expansion to trillions of dollars in tokenized digital securities by 2030.
Major companies like Goldman Sachs are actively entering the tokenization space, with plans to launch new tokenization products driven by increasing client interest. This indicates a growing recognition of the potential of RWA tokenization within the asset management industry.
