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Saturday, June 10, 2023

Citi: Real-World Asset Tokenisation to Reach $5Trillion by 2030

As the crypto industry continues to evolve, investment bank Citi is predicting that the tokenisation of real-world assets on the blockchain will be the next major use case for cryptocurrencies. According to Citi’s “Money, Tokens and Games” March report, the market for tokenised digital securities is projected to reach between US$4 trillion (RM17.64 trillion) and US$5 trillion by 2030, representing an 80-fold increase from the current value of real-world assets locked on blockchains.

Citi’s analysts predict that the tokenisation will include US$1.9 trillion in debt, US$1.5 trillion in real estate, US$0.7 trillion in private equity and venture capital, and between US$0.5 trillion and US$1 trillion in securities. Private equity and venture capital funds are expected to be the most tokenised asset class, capturing 10% of the total addressable market, with real estate following at 7.5%.

Citi believes that the private equity markets will likely see faster adoption rates of blockchain tokenisation due to their favourable liquidity, transparency, and fractionalisation properties. Blockchain tokenisation will outperform traditional financial infrastructure due to its technological superiority and the increased investment opportunities it offers in private markets.

This projection by Citi is significant because it suggests that blockchain technology is gaining mainstream acceptance and being recognised as a viable alternative to traditional financial systems. Tokenisation of assets has many advantages, including lower costs, increased liquidity, and faster settlement times. By leveraging blockchain technology, tokenisation also offers greater transparency and security, which can lead to increased trust and confidence in financial markets.

The projected growth in the tokenisation of real-world assets on the blockchain presents a significant opportunity for investors and companies alike. By leveraging this technology, businesses can unlock new sources of capital and create innovative financial products. For investors, tokenisation offers access to previously inaccessible asset classes and new investment opportunities in private markets.

In conclusion, Citi’s prediction of the tokenisation of real-world assets on the blockchain as the next major use case for cryptocurrencies highlights the potential of this technology to transform traditional financial systems. As the crypto industry continues to evolve, we can expect to see more innovative use cases emerge, driving growth and unlocking new opportunities for businesses and investors.

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