- Tokenization of financial assets like bonds has been accelerating since 2017, driven by high-yield environments according to a Coinbase report.
- There is a major shift towards higher opportunity costs and capital efficiency from instant settlement. Retail investors are adopting protocols tapping the tokenized Treasury market amid rising yields, signaling a departure from 2017.
- Estimates predict enormous growth potential for tokenized assets, with projections of $5-16 trillion market size by 2030. However legal and infrastructure challenges persist, and institutions currently prefer private blockchains.
The tokenization of financial assets like bonds and money market funds has been accelerating since 2017, driven by high-yield environments. However, significant infrastructure and legal obstacles persist, according to a recent Coinbase report.
The Current Landscape
Coinbase has identified a major shift towards higher opportunity costs for tokenization, emphasizing the capital efficiency of instant settlement. Retail investors are also increasingly adopting protocols tapping into the tokenized US Treasury market amid rising bond yields. This signifies a departure from 2017, and the trend is expected to accelerate over 1-2 years.
Market Growth Projections
Estimates predict enormous growth potential for tokenized assets, with projections ranging from $5 trillion to $16 trillion in market size by 2030. However, legal and infrastructure challenges remain. Many institutions prefer private blockchains currently due to public network concerns.
While future growth estimates are bullish, the report reiterates that hurdles around regulation and infrastructure must still be overcome before the full promise of asset tokenization can be realized. But the market is clearly gaining momentum.