How Global Giants Are Betting Big on Tokenization—and Why You Should Too?

Tokenization is striking waves around the world. With the potential to transform traditional financial practices, it’s creating new innovative ways to digitize bonds, stocks, and funds in the form of tokens and interact with real-world assets.

Leading financial giants like Citigroup, BlackRock, and HSBC are already driving Asset Tokenization Development, turning traditional assets like treasuries and commodities into streamlined, accessible digitalized tokens. Codified into ‘Smart Contracts’, these tokens are creating new avenues for growth and investments.

“As per the Financial Stability Board (FSB), tokenization has the potential to enhance efficiency in financial transactions and, at present, poses minimal risk to financial stability due to its limited adoption”

Why Tokenization is the Next Big Leap?

• 24/7 Asset Trading: Tokenization will merge traditional and digital markets, enabling 24/7/365 asset trading that is smarter, faster, and cheaper.
• Market Growth: A recent BCG/ADDX analysis estimates Global Tokenization Adoption could unlock $16-$68 trillion in market opportunities within the next 6 years.
• Increased Accessibility: Fractionalization of tokenized assets reduces minimum investment amounts, allowing broader access to investments in luxury properties, fine art, and collectibles.
• Mainstream Adoption: On-chain real-world assets (RWAs) have grown to a $7.5 billion market, projected to reach $16 trillion by 2030, signaling tokenization’s mainstream integration.
• Institutional Interest: BlackRock’s tokenized fund, BUIDL, and the success of Bitcoin ETFs showcase significant institutional and investor interest.
• Decentralized Finance: Trends like “Bring Your Own Wallet” (BYOW) are empowering investors to bypass intermediaries, paving the way for Worldwide Asset Tokenization for decentralized finance and asset management.

Tokenized Asset Lifecycle

Real-world assets undergo the Asset Tokenization Development process through two routes:

• Digital twinning: It creates blockchain-based representations of physical assets like gold or real estate.
• Native On-Chain Tokens: They are purely digital assets created through issuance. 

Both types enter the market through sales to investors, with transactions settled on-chain. Assets are then held either directly or by custodians. Owners can exercise associated rights (like redeeming for fiat) or participate in programmed conversions based on smart contracts.

Emerging Use-Cases in Asset Tokenization Across Markets

Asset tokenization is catching the eye of the financial world, and there are a growing number of use cases across sectors. Here are a few of the most exciting use cases for tokenizing Global Assets. 

• Bond Issuance: Tokenizing bonds on blockchain enhances transparency and quicker settlement times. The European Investment Bank has already issued tokenized bonds through platforms by HSBC and Goldman Sachs. As secondary markets mature, tokenized bonds could improve liquidity and make them more accessible, especially in the fixed-income market.
• Repo Transactions: JPMorgan’s Onyx platform processed over $300 billion in intraday repo transactions, showcasing how tokenization can simplify the repo market. Broadridge’s Distributed Ledger Repo platform now handles $1 trillion in monthly global volumes, demonstrating blockchain’s potential to transform this area.
• Exchange-Traded Products (ETPs): Tokenizing ETFs speeds up settlements, boosts transparency, and opens up access for a wider range of investors. Some Asset Tokenization Development companies have already launched tokenized ETFs, and traditional finance giants like State Street are exploring tokenization for stocks and bonds.
• Commodities: Over $1 billion in tokens have been issued by startups, representing ownership in physical gold. Even traditional commodity traders are diving into tokenization. Santander Bank, for example, has piloted loans to Argentinian farmers, secured by tokenized agricultural commodities such as soybeans, corn, and wheat.

Latest Tokenization Practices Going Beyond Borders

The tokenization market was valued at USD 2.3 billion in 2021 and is projected to reach USD 5.6 billion by 2026, reflecting a robust CAGR of 19.0%. This growth underscores the increasing adoption of Local to Global Blockchain Solutions worldwide.

Local Tokenization Trends

Gujarat:  Gujarat’s GIFT City launched a regulated tokenization platform, focusing on real estate and attracting foreign investment through fractional ownership.

Maharashtra: Maharashtra is tokenizing real estate assets to combat high property prices to democratize access for smaller investors in high-value markets.

Rajasthan is exploring renewable energy project tokenization, which would empower the Green Asset Tokenization initiative and fractional ownership.

International Tokenization Trends

North America: Home to major players like Visa and Mastercard, North America is a leader in tokenization, driven by the need for enhanced payment security and compliance.

Europe: Countries like Germany and France are investing heavily in blockchain technology, with regulatory frameworks fostering innovation in tokenized assets.

Asia-Pacific: Japan and China are at the forefront of adopting Asset Tokenization Services, particularly in sectors like finance and e-commerce, due to their technological advancements.

Factors Driving the Adoption

The need for compliance with regulatory reporting standards is pushing businesses to adopt Tokenization Across Borders.

1. The need for compliance with regulatory reporting standards is pushing businesses to adopt Tokenization Across Borders.
2. Increasing financial fraud has heightened the demand for solutions that enhance customer experience while maintaining security.

Tokenization Opportunities Ahead

The rise of cloud-based tokenization solutions and growing consumer preference for contactless payments and cross-border asset tokenization present significant opportunities for growth across various sectors.

Companies like American Express and Mastercard are leading initiatives that integrate cloud-based payment solutions and enhance security through tokenization, indicating a trend toward more secure digital transactions.

Picture Credits: McKinsey & Company 

Expert Opinion – RWA tokenization will realize the long-lost dream of mainstream adoption by finally connecting traditional finance with DeFi’s innovation. It’s building a financial system where everyone has a seat at the table.

-Vikram R Singh, Founder and CEO- Antier

Prepare For the Change

Asset tokenization Development holds incredible potential to transform financial markets. By leveraging blockchain technology, markets can become faster, more efficient, and more transparent. Instantaneous, atomic settlement, drastically reducing the need for multi-day processes and allowing 24/7 trading. This constant availability could drive liquidity by attracting diverse market participants.

Yet, for expanding tokenization globally and harnessing these benefits, a fully integrated ecosystem, including a global regulatory landscape for tokenization and effective digital asset transaction solutions is a must.

Tokenize Your Vision with Antier

At Antier, we truly believe in the potential of tokenization across various sectors.

Our mission is to unlock tremendous benefits that can enhance financial inclusion and democratize access to investment opportunities. Our expert Tokenization Development services help anyone to embark on their tokenization journey effortlessly.

Easily tokenize assets ranging from real estate to digital art, creating new revenue streams and enhancing liquidity.

Discover how simple it is to tokenize assets.