Reports suggest tokenised illiquid assets to be worth $16.1T by 2030
Countries like Singapore and Australia are set to implement new regulations in favour of the digital assets market
By Shashank Bhardwaj
Boston Consulting Group suggests the world shift its focus towards tokenising illiquid assets. According to their report, the total potential of illiquid assets accounts for a huge chunk of money. The primary reason for this illiquidity, as the consulting group suggests, is the limited affordability for the mass investors. Most of the money invested in illiquid assets is either in real estate, initial public offering stocks, luxury beverages, physical art, etc. The report suggests that the illiquid assets are growing in size because of a lack of wealth management skills; thus, the potential for tokenisation is huge.
By 2030, the total economy of tokenised illiquid alone can reach $16.1T. Blockchain technology plays a huge role in this process as the on-chain tokenisation market also seems to be expanding. The on-chain tokenisation market was worth $2.3 billion in 2021 and is expected to grow to $5.6 billion by the end of 2026. The potential can be seen in the digital asset trading volume soaring from 30 billion Euros to 150 billion Euros in the last two years.
Tokenised illiquid assets largely include financial assets, home equity, patents, car fleets, etc. Under the best-case scenario, the potential for tokenised illiquid assets is around $68T. The only problem in achieving this huge position is the variation in digital asset laws and regulations in different regions and the difference in asset class size. Singapore had recently announced a DeFi application plan in the wholesale funding market. The country plans to issue tokenised bonds to execute easier borrowing and lending processes on the blockchain. Similar plans and regulations are applied in countries like the US, UK, Germany, UAE, etc.
“On-chain asset tokenisation presents an opportunity to obviate many of these barriers of asset illiquidity as well as the current modality of traditional fractionalisation,” says BCG report on the tokenisation potential of the illiquid assets. Real estate comes out to be a strong front in the tokenisation potential. It can be a primary factor for the security token offerings for the technology providers. Another report suggested that tokenised bonds, equities, funds or carbon credits from the Australian Securities Exchange might be available for trade soon. Thus, the market potential for tokenised illiquid assets seems to keep increasing.
Shashank is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash
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