The potential market for real assets (RWA) in the traditional finance (TradFi) sector can reach up to 400 trillion USD, significantly expanding the growth space for RWA tokenization.
Research shows that RWA currently occupies a small part of the total TradFi market, with a scale of about 26 billion USD, including assets such as private credit, treasury bonds, commodities, stocks, alternative funds, and global bonds.
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The market size of TradFi can reach up to 400 trillion USD, presenting significant potential for the tokenization of real assets.
RWA currently accounts for about 26 billion USD, which is just a small part of the total potential market.
What is the real asset (RWA) market and why is it so promising?
RWA includes traditional assets such as private credit, treasury bonds, commodities, and stocks, playing an essential role in the overall traditional financial market (TradFi). According to research by experts from Animoca Brands, the total TradFi market currently has the potential to reach 400 trillion USD, with RWA only accounting for a very small part of about 26 billion USD.
This indicates an extremely large opportunity to expand the market for tokenizing real assets, helping to enhance liquidity and diversify financial products. RWA tokenization becomes a highlight for development in the modern finance sector, effectively and transparently bringing traditional assets onto the blockchain platform.
Why are large asset managers racing to build integrated asset platforms?
Leading asset managers are entering a strategic race to develop a comprehensive asset management platform from end to end (full-stack platform). The goal is to control the asset lifecycle to create sustainable long-term value.
Having control over the entire process from issuance, management to trading of real assets provides a significant competitive advantage. Successful entities will be able to extract great value through interdisciplinary collaboration, integrating blockchain technology and modern financial governance.
“The massive TradFi market of 400 trillion USD opens up vast development space for the tokenization of real assets, representing a significant opportunity for the entire digital finance industry.”
– Andrew Ho & Ming Ruan, researchers at Animoca Brands, August 2023 report
How does RWA tokenization impact the traditional financial market?
Tokenizing real assets helps create enhanced liquidity, reduce transaction costs, and improve transparency compared to traditional methods. This encourages participation from more investors and expands the financial ecosystem on digital platforms.
Moreover, segmenting large assets into smaller tokens helps diversify personal and institutional investment portfolios. Recent studies also indicate rapid growth of RWA tokens in the coming years in line with global digitization trends.
What types of assets are currently considered popular RWAs?
RWA exists in many forms such as private credit, treasury bonds, commodities, stocks, alternative funds, and global bonds. These are traditional assets that have long been present in the global financial system.
Tokenizing each type of asset helps expand investment opportunities and facilitate international trading thanks to the borderless capabilities of blockchain technology. At the same time, technical solutions aimed at ensuring safety and legality for RWA tokens are being actively developed.
What are the challenges and key strategies in developing RWA tokenization?
Despite the significant potential, the tokenization process of RWA still faces many challenges such as an incomplete legal framework, difficulties in risk management, and technology integration. Market leaders need to build flexible strategies and collaborate with regulators to create a sustainable development environment.
A comprehensive integrated platform development strategy that controls the asset cycle from start to finish helps increase long-term value. At the same time, incorporating advanced security technology and transparent information is crucial in the competitive market of digitized real assets.
Frequently Asked Questions
What is tokenization of real assets?
Tokenization of real assets is the process of converting traditional assets such as bonds, stocks, or commodities into digital tokens on a blockchain platform to increase liquidity and ease of trading.
Why does the RWA market occupy such a small share of the total TradFi market?
New digitized real assets are in the early stages of development, not yet widely implemented, so the value of RWA currently occupies a very small portion compared to the total scale of the traditional financial market.
What are large asset managers doing to leverage RWA?
They focus on building an integrated platform to control the entire asset cycle, from issuance to trading, aiming to increase value and management efficiency.
How can RWA change the traditional financial market?
Tokenizing RWA enhances liquidity, reduces transaction costs, and expands opportunities for more diverse investments in the modern financial market.
What are the major challenges of RWA tokenization?
Challenges include an incomplete legal framework, technology risk management, and complex system integration, requiring in-depth development strategies to address.
Source: https://tintucbitcoin.com/animoca-rwas-chiem-thi-truong-tradfi-lon/
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