The market value of tokenized assets is projected to surpass $10 trillion by 2030, according to an October 2023 report by Roland Berger, which will redefine the dynamics of asset ownership and investment.
Tokenization of real-world assets is one of several emerging technologies adding to the evolution of the financial world, Roland Berger reported, and is projected to increase by 40-fold between 2022 and 2030.
Tokenization involves the conversion of tangible and intangible assets—such as real estate, art, and commodities—into digital tokens on blockchain platforms. These tokens allow for fractional ownership, thereby increasing liquidity and expanding access to assets that have traditionally been out of reach for most investors.
The benefits of tokenization include the potential to enhance liquidity, provide greater accessibility, and offer new avenues for portfolio diversification, according to London-based blockchain development firm Interexy. The process could lead to cost efficiencies and improved transparency, as blockchain technology inherently reduces administrative burdens and bolsters the security of transactions.
The development of tokenization still faces hurdles, according to the Roland Berger report. The most pressing of these is the regulatory environment. Clear regulatory frameworks are needed to protect investors and ensure the integrity of financial markets, the report said. Without robust regulations, the risks of fraud, money laundering, and market manipulation could undermine trust in this burgeoning market.
The integration of tokenized assets into traditional financial markets also presents challenges, according to Interexy. While fractional ownership and increased liquidity could democratize investment opportunities, attracting a broader range of participants, these innovations will require substantial adjustments in existing market infrastructures. Furthermore, the regulatory landscape must evolve in tandem with the technology to support its growth without stifling innovation.