Amid the ongoing crypto bear market, the tokenization of real-world assets (RWA) has emerged as a prominent growth area within the cryptocurrency and blockchain space. The total value of tokenized real-world assets has reached an all-time high and shows no signs of slowing down. Decentralized finance analyst ‘Viktor DeFi’ even predicts that RWA tokenization will surpass $10 billion by 2024.
The Real-World Assets Narrative
Despite the extended crypto winter, RWA tokenization remains one of the most compelling narratives in the crypto industry. Real-world assets, which are tangible assets existing in the physical world, are being bought and sold on blockchain networks.
According to Galaxy Research, the total value of all tokenized real-world assets reached an unprecedented $3.1 billion in August. These assets encompass various sectors, including gold and precious metals, equities, money markets, carbon offsets, treasuries, real estate, and private credit.
Galaxy Research highlights that the recent expansion of RWAs is driven by on-chain demand for off-chain yield sources. Yield-bearing RWAs have grown by $1.44 billion, accounting for 87% of the $1.66 billion added to RWAs this year.
Key Asset Categories
Among tokenized real-world assets, gold and precious metals make up approximately 37% of the total value, followed by money markets at 23%, and tokenized treasuries at 20%. Tokenized treasuries have experienced explosive growth, surging by about 450% since the start of 2023. However, growth in this category has plateaued since mid-June.
Tokenized Asset Coalition and All-Time Highs
Centrifuge and Goldfinch, two prominent players in the RWA tokenization space, recently achieved all-time highs in active loan values after joining the newly formed Tokenized Asset Coalition (TAC). TAC, established on September 7, boasts members such as Circle, Coinbase, Aave, and Goldfinch. The coalition’s mission is to educate the industry, advocate for standardization, and collaborate on building the protocols and infrastructure necessary for widespread adoption.
ANZ and Chainlink: Testing Tokenized Asset Transfer
Australia’s ANZ, one of the country’s largest institutional banks, conducted a successful test of cross-chain transfer for tokenized assets using Chainlink technology. ANZ tested the Chainlink Cross-Chain Interoperability Protocol (CCIP) to simulate the purchase of a tokenized asset using a digital Aussie dollar (A$DC) and an ANZ-issued Z-dollar-denominated stablecoin. This test illustrates how financial institutions can leverage CCIP to facilitate cross-chain transactions across both public and private blockchains.
Despite the challenging crypto market conditions, the tokenization of real-world assets continues to gain traction, reaching all-time highs in terms of total value. The participation of major institutions, the formation of industry coalitions, and successful tests of cross-chain asset transfers all point to the increasing adoption and integration of tokenized real-world assets within the broader financial ecosystem. This trend is likely to shape the future of finance, offering new opportunities for investment and financial innovation.