McKinsey Sees Just $2T of Tokenized RWAs by 2030 in Base Case, With Broad Adoption ‘Still Far Away’

The
market
of
tokenized
assets
might
be
just
$4
trillion
even
in
an
optimistic
scenario
by
2030
as
financial
institutions
embrace
blockchain
technology
for
traditional
financial
instruments
at
a
slower
pace
and
limited
range
of
assets
than
more
optimistic
reports
predicted,
global
consulting
firm
McKinsey
&
Company
said
in
a
Thursday

report.

“Broad
adoption
of
tokenization
is
still
far
away,”
the
authors
said,
noting
the
number
could
be
as
low
as
$1
trillion.
“As
infrastructure
players
pivot
away
from
proofs
of
concept
to
robust
scaled
solutions,
many
opportunities
and
challenges
remain
to
reimagine
how
the
future
of
financial
services
will
work.”

Tokenization
emerged
as
one
of
the
hottest
use
cases
for
blockchains
during
this
bull
market
as
global
asset
managers
and
banks
such
as
BlackRock,
Citigroup
and
HSBC
along
with
native
digital
asset
firms
are
putting
old-school
assets
such
as
U.S.
Treasuries
and
commodities
–
also
known
as
real-world
assets
(RWA)
–
to
blockchain
rails
in
hopes
for
operational
efficiencies
and
broader
access
among

benefits.

The
trend
gained
widespread
attention
over
the
past
year
with
reports
by

Boston
Consulting
Group
and
digital
asset
manager

21Shares
predicting
the
tokenized
asset
market
to
reach
several
multiples
of
the
McKinsey
estimate
by
the
end
of
the
decade.

Read
more:



Why
Asset
Tokenization
Is
Inevitable

The
McKinsey
report
said
that
tokenization
is
at
a
“tipping
point,”
with
many
projects
stepping
out
from
pilot
to
deployment
at
scale.

In
its
base
case,
the
company
estimated
the
tokenized
asset
market
to
reach
nearly
$2
trillion
market
size
by
2030,
notably
excluding
tokenized
deposits,
stablecoins
and
central
bank
digital
currencies
from
calculation.

McKinsey’s
$4
trillion
bullish
scenario
would
be
supported
by
more
accommodating
regulations,
industry-wide
collaboration
and
without
any
systemic
events
happening
that
would
hinder
adoption.

Mutual
funds,
bonds,
exchange-traded
notes,
repurchase
agreements
(repos),
alternative
funds,
loans
and
securitization
will
be
the
frontrunners
of
tokenization
efforts,
according
to
the
report.

Meanwhile,
the
authors
see
slower
adoption
for
assets
such
as
real
estate,
commodities
and
equities,
citing
reasons
like
marginal
benefits,
concerns
over
feasibility,
complex
compliance
requirements
or
lack
of
incentive
for
key
industry
players
to
pursue
tokenization.

Many
institutions
still
are
in
“wait
and
see”
mode
anticipating
a
clearer
signal
to
implement
tokenization,
which
may
put
early
movers
in
position
to
capture
“oversized”
market
share,
the
report
added.

“Blockchain
technology
is
still
in
early
days
and
requires
a
material
amount
of
integration
with
existing
processes
and
standards,”
Anthony
Moro,
CEO
of
Provenance
Blockchain
Labs,
said
in
a
note
to
CoinDesk.
“Most
institutions
recognize
tokenization
needs
to
be
a
large
part
of
their
business
moving
forward,
but
technical
integration
is
where
the
rubber
meets
the
road.”