A recent research report by Bernstein highlights the clear advantages of tokenization, including operational efficiencies, improved liquidity, and enhanced accessibility. Tokenization refers to the process of converting real-world assets into blockchain-based tokens.
Bernstein predicts a significant market opportunity for tokenization, estimating a potential size of up to $5 trillion in the next five years. This growth will be primarily driven by stablecoins, central bank digital currencies (CBDC), private market funds, securities, and real estate.
According to the report, currency tokenization, specifically through stablecoins and CBDCs, is expected to revolutionize on-chain deposits and payments. It is estimated that approximately 2% of the global money supply, equivalent to $3 trillion, will be tokenized within the next five years.
The analysts, led by Gautam Chhugani, anticipate a significant increase in the circulation of stablecoins and CBDC tokens, with the Chinese CBDC program playing a prominent role. These digital currencies, along with decentralized market yield farming, are expected to become strong alternatives to traditional bank deposits for investments and savings.
However, the report also acknowledges the regulatory uncertainties surrounding tokenization. The success of blockchain-based tokenization relies heavily on policymakers recognizing the advantages of blockchains and understanding the important role of crypto tokens in blockchain operations.
The report emphasizes that the regulatory framework implemented by policymakers will shape their perception of tokenizing real-world assets. It cautions that unfavorable regulations could potentially hinder the benefits offered by tokenization.
Compiled by Coinbold