The market for tokenized real-world assets is projected to reach $30.1 trillion by 2034, according to a report by Standard Chartered. This significant market growth highlights the increasing role of tokenization in transforming global trade and finance by enhancing liquidity, accessibility, and efficiency. The report emphasizes the shift towards integrating digital assets into mainstream finance, reflecting the broader adoption and scalability of blockchain technology and DeFi applications. Kai Fehr, Global Head of Trade at Standard Chartered, commented on the importance of industry-wide collaboration to unlock the trillion-dollar opportunity presented by tokenization.
Standard Chartered’s analysis emphasizes the transformative impact of tokenizing trade finance assets, which traditionally offer strong risk-adjusted returns and low default rates but are underinvested in. Tokenization enables fractional ownership, operational efficiency, and improved financial market infrastructure, unlocking new opportunities for investors and helping to bridge the $2.5 trillion global trade finance gap. The evolution of tokenization has been rapid, with significant milestones such as the introduction of Bitcoin in 2009 and Ethereum in 2015 bringing smart contracts and decentralized applications into the financial ecosystem. Regulatory frameworks and industry collaborations, such as Project Guardian led by the Monetary Authority of Singapore, have further demonstrated the viability and benefits of tokenized assets.
As the market for tokenized assets expands, Standard Charter expects demand to soar, with projections indicating that 69% of buy-side firms plan to invest in tokenized assets by 2024. This growing interest is driven by the potential for reduced transaction costs, enhanced liquidity, and access to new asset classes. Despite the current market size of tokenized real-world assets being around $5 billion (excluding stablecoins), the potential addressable market, including trade finance gaps, is estimated to be $14 trillion. Standard Chartered’s successful pilot of asset-backed security tokens on the Ethereum blockchain highlights the practical applications of tokenization in improving market access and operational efficiency.
The report advocates for increased collaboration among financial institutions, regulators, and technology providers to create a supportive environment for tokenization, emphasizing the need for standardized processes, regulatory compliance, and interoperability. It concludes that the financial industry stands at a critical juncture, with tokenization poised to revolutionize asset management, trade finance, and global economic activities. By embracing tokenization, stakeholders can enhance capital efficiency, broaden market access, and drive innovation, paving the way for a more inclusive and resilient financial ecosystem. With the potential for a $30.1 trillion market by 2034, it is clear that tokenization will play an increasingly important role in the future of global finance and trade.
