The Trillion Dollar Crypto Opportunity: Real World Asset Tokenization
Web3 technologies, such as DeFi and NFTs, are paving the way for the tokenization of real-world assets, which could unlock a new Golden Age in blockchain and traditional finance.
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Posted 8/31/2023, 8:24:00 PM
coindesk.com
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Tokenization of real-world assets on the blockchain is rapidly gaining momentum, offering benefits such as transaction speed, liquidity, cost-savings, and round-the-clock access, with experts predicting it to become a $16 trillion industry by 2030. Over 70% of financial leaders expect to use tokenization in their businesses, with potential impacts on asset trading, real estate transactions, derivatives, and carbon markets. Tokenization unlocks liquidity, enhances security and data protection, reduces transaction costs, and enables programmability and automation, making it a key driver of digital asset adoption and a fundamental shift in business operations.
Hong Kong's Financial Secretary, Paul Chan Mo-po, believes that blockchain and Web3 technology will drive the next wave of growth in the digital tech sector, particularly in emerging areas such as NFTs, GameFi, Play-to-Earn gaming, and immersive entertainment.
Solana co-founder Raj Gokal discusses the real-world use cases, architectural considerations, mobile and payments landscape, asset tokenization, and mitigating risks associated with the Web3 ecosystem.
Mirae Asset Securities, South Korea's largest financial group, is partnering with Ethereum scaling platform Polygon Labs to promote tokenization in finance and drive the adoption of Web3 technologies. Through the collaboration, Mirae aims to establish itself as a global leader in tokenized securities, bringing real-world assets onto the blockchain. Tokenization projects have already been initiated by other financial giants, and the industry is projected to grow significantly, reaching $16.1 trillion by 2030. The partnership is expected to accelerate the adoption of Web3 technologies in the financial sector and enhance interoperability with foreign financial systems.
The nonfungible token (NFT) market has experienced a significant decline in value, but experts believe that NFTs still have potential for growth and innovation in the future, particularly if they can offer tangible benefits and utility beyond digital art, such as asset-backed NFTs and membership-based models.
Coinbase has introduced a Web3 wallet for institutions, allowing professionals to access crypto, NFTs, dapps, and DeFi in a secure and controlled manner.
Tokenization of real-world assets has the potential to become a $16 trillion industry, providing solutions to issues such as financial inclusion and agricultural insurance in developing countries, according to industry experts at Swiss Web3 Fest.
The U.S. Federal Reserve has launched FedNow, the country's first government real-time payment system, allowing banks and credit unions to instantly transfer money for their customers and improve inter-bank and retail transactions, although concerns remain about competition with private-sector entities. However, while FedNow does not use blockchain technology, its goal aligns with blockchain innovations of enabling instant peer-to-peer transfers and low-cost payments, and blockchain projects may benefit from leveraging FedNow's infrastructure. Nonetheless, decentralization and user-first approaches in Web3 payment systems could offer greater financial inclusion and transform the payments space.
The crypto industry should focus on using smart contracts to solve real-world business problems rather than being fixated on token prices, according to Google Cloud's Head of Web3, James Tromans, who emphasized the importance of business logic and user experience in blockchain technology. He believes that when user experience improves and blockchain technology is seamlessly integrated into various industries, it will no longer be called Web3, but simply referred to as the web again.