The Tokenized Asset Coalition, consisting of industry leaders such as Coinbase and Circle, aims to promote the tokenization of traditional financial assets on a blockchain to bring the "next trillion dollars of assets" on-chain through education, advocacy, and fostering adoption of public blockchains and decentralized finance.
The Federal Reserve has released a paper discussing the benefits of tokenizing real-world assets on blockchains, stating that it has the potential to provide access to otherwise inaccessible markets and improve liquidity.
Despite the prevalence of private blockchains in the banking sector, the co-founder of Chainlink predicts that public blockchain protocols will ultimately become the biggest market for banks' tokenized real-world assets, as they offer diversified collateral and attractive yields. However, financial institutions in the US may proceed with caution due to regulatory uncertainty. On the other hand, European and Asian banks are progressing in this area, with companies such as Citi and JPMorgan exploring tokenization on public blockchains like Ethereum. Franklin Templeton has also embraced public blockchains, recognizing their cost efficiency and rate of innovation. Interoperability and cross-border liquidity are key considerations for banks as they adopt tokenization and explore ways to move assets across chains.
Backed Finance has announced the launch of a tokenized government bond on the Base layer-2 network, with plans to expand its product offering by tokenizing other assets, such as equities and commodities.
Swiss tokenization firm Backed Finance has launched the first real-world asset token on Coinbase's Base blockchain, offering a blockchain-based version of BlackRock's short-term US Treasuries ETF, with a 5.25% annual yield, to qualified investors and licensed distributors.
