Tokenization: A Multi-Trillion Dollar Opportunity on the Horizon
Tokenization could emerge as a multi-trillion-dollar market opportunity, according to insights from the world’s largest management consulting firm.
Tokenized US Treasurys Could Hit $3 Billion by End of 2024
The market for tokenized United States Treasurys is poised to reach $3 billion by the end of 2024, underscoring the growing benefits and adoption of financial asset tokenization. This ambitious target would require nearly doubling the current market size within the year.
Tom Wan, a research strategist at 21.co, highlights that the increasing trend of decentralized autonomous organizations diversifying their holdings into tokenized US Treasurys is a significant driver of this growth.
Global Giants Fueling Growth
According to Wan, the product offerings from industry leaders like Securitize and BlackRock are pivotal in reaching the $3 billion milestone. In a July 15 post on X, he stated:
“With these two projects allocating to tokenized US Treasurys, we could see the total market cap of tokenized US Treasurys exceed $3 billion by the end of 2024.”
Current data from Dune indicates that tokenized US government securities have already accumulated over $1.6 billion in total assets under management.
BlackRock’s Dominance in the Tokenized Treasury Market
BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) recently became the largest tokenized Treasury fund, surpassing Franklin Templeton’s fund. In just six weeks, BUIDL amassed a market capitalization of over $375 million, and it now holds more than $528 million with a market share exceeding 28.8%.
Wan notes that BlackRock’s fund will significantly boost inflows into tokenized Treasurys. He emphasized:
“As laid out by Securitize and BlackRock, their strategy aims to provide diversification for the crypto ecosystem to access risk-free US Treasury yields without leaving the blockchain ecosystem.”
The Broader Tokenization Landscape
The potential of tokenization extends far beyond Treasurys. A report by the Global Financial Markets Association (GFMA) and Boston Consulting Group estimates that the global value of tokenized illiquid assets will grow to approximately $16 trillion by 2030. Even more conservative estimates from Citigroup predict that $4 trillion to $5 trillion worth of tokenized digital securities will be minted by 2030.
Recognizing this potential, large companies worldwide are ramping up their tokenization efforts. For instance, Goldman Sachs plans to launch three new tokenization products later this year in response to rising client interest.
Tokenization is clearly shaping up to be a transformative force in the financial markets, with immense growth opportunities on the horizon.
Featured image from: cointelegraph.com