According to a newly-released report by the Boston Consulting Group (BCG) and ADDX, a digital exchange for private markets, the total size of tokenized illiquid assets, including, but not limited to, real estate and natural resources, could reach $16.1 trillion by 2030. As reported on Cointelegraph.com, on-chain asset tokenization, which is a market that surpassed $2.3 billion in 2021 and is expected to reach $5.6 billion by 2026, could solve this problem of asset illiquidity, as emphasized in the tokenization report.
The way the news outlet explains it, illiquid assets could also include pre-initial public offering (IPO) stocks, real estate, private debt, revenues from SME businesses, physical art, private funds, wholesale bonds and many more. Reasons for this asset illiquidity, as highlighted by Cointelegraph, are attributed to factors such as limited affordability for mass investors, lack of wealth manager expertise, limited access such as when assets are restricted to elite cliques (in the case of fine art and vintage cars), regulatory hurdles and other scenarios in which users have difficulty acquiring or trading an asset.
As noted by Cointelegraph, the report forecasts that, by 2030, the on-chain asset tokenization opportunity will reach $16.1 trillion — made up largely of financial assets (as insurance policies, pensions and alternative investments), home equity, and other tokenizable assets, such as infrastructure projects, car fleets and patents. That said, the potential of tokenized assets will differ across countries due to various regulatory frameworks and asset class sizes, as mentioned by the news outlet, with the report noting that tokens issuance is already regulated in Singapore, Hong Kong, Japan, the European Union, the United Kingdom, the United States, the United Arab Emirates, Germany, Austria and Switzerland.
In terms of illiquid assets, real estate stands to really benefit from tokenization, considering investors look for investments backed by real-world assets in DeFi, with Cointelegraph Research Terminal revealing that real-estate assets account for more than 40% of the pipeline for certain technology providers, making it one of the primary sectors for security token offerings. Earlier this month, the digital asset investment platform Zerocap announced that companies on the Australian Securities Exchange (ASX) would be able to trade tokenized bonds, equities, funds or carbon credits after a successful proof-of-concept trial, Cointelegraph concludes.
- NewlyReleasedReportFromBostonConsultingGroup(BCG)andPrivateMarketsDigitalExchangeRevealsThatTheTotalSizeOfTokenizedIlliquidAssetsIncludingRealEstate&NaturalResourcesCouldReach$16.1TrillionBy2030withReasonsForAssetIlliquidityAttributedToFactorsSuchAsLimitedAffordabilityForMassInvestors/LimitedAccess/RegulatoryHurdlesAndOtherScenarios
- TheReportForecastsThatBy2030theOnChainAssetTokenizationOpportunityWillReach$16.1TrillionMadeUpLargelyOfFinancialAssets(InsurancePolicies/pensionsAndAlternativeInvestments)/HomeEquity&OtherTokenizableAssetsSuchAsInfrastructureProjects/CarFleets&PatentsWhileThePotentialOfTokenizedAssetsWillDifferAcrossCountriesDueToRegulatoryFrameworks
- TokensIssuanceIsAlreadyRegulatedInSingapore/HongKong/Japan/TheEuropeanUnion/TheUnitedKingdom/TheUnitedStates/TheUnitedArabEmirates/Germany/AustriaAndSwitzerland;RealEstateAssetsAccountForMoreThan40%ofThePipelineForCertainTechnologyProvidersMakingItOneOfThePrimarySectorsForSecurityTokenOfferingsBasedOnCointelegraphResearchTerminal
https://cointelegraph.com/news/tokenization-of-illiquid-assets-to-reach-16t-by-2030-report