The Tokenization Market in Q2 2024: Laying Foundations for Scale Deployment
Linh Tran

The second quarter of 2024 ("Q2") witnessed significant expansion in the Real-World Asset (RWA) tokenization market. This growth is evident in two key dimensions:

  • Vertical growth: The total value of tokenized assets has increased substantially.
  • Horizontal growth: Tokenization is now being applied to a wider range of asset classes.

As we conclude Q2 2024, it's time to take a look at the current state of the tokenization market. Let’s get dive in!

RWA Tokenization Market Snapshot

According to a recent Coinbase Q2_2024 State Of Crypto report, tokenized asset value (non-stablecoin, publicly trackable assets only) has reached $3 billion. Types of assets that have been tokenized include but are not limited to commodities, government securities, private debt, private equities, private funds, equities and corporate bonds.

Government securities are driving real-world asset tokenization, led by the $382 million BlackRock's tokenized US Treasury Fund BUIDL and Franklin Templeton’s $360 million US Treasury money market fund FOBXX.

Gold is by far the #1 commodity, accounting for nearly the entire $1 billion in tokenized commodities. Other tokenized commodities include but are not limited to silver, platinum, and uranium.

Paxos Gold ($PAXG) has been the largest tokenized commodity asset - Source:

The overall value of tokenized loans on public blockchains grew from near zero in October 2020 to over $400 million by April 2024. Types of loans tokenized have diversified to include trade financing, revenue-based financing, and real estate financing, among other categories.

Outstanding RWA Tokenization Market Updates

Recent advancements in real-world asset (RWA) tokenization are paving the way for a transition from pilot to scale deployment. These developments include notable policy initiatives, regulatory actions, and significant project launches that signal the increasing integration of tokenization into various sectors. 

Notable initiatives and developments by jurisdiction across the globe:

  • [Japan] Tokyo subsidizes digital securities issuance costs for startups, offering support of up to five million yen each.
  • [United States] The Financial Services Committee held a hearing on 5 June on “Next Generation Infrastructure: How Tokenization of Real-World Assets Will Facilitate Efficient Markets.”
  • [Hong Kong] The Hong Kong Monetary Authority (HKMA) announced an expansion of the cross-boundary e-CNY pilot in Hong Kong.
  • [Singapore] The Monetary Authority of Singapore (MAS) expands industry collaboration to scale asset tokenization for financial services through Project Guardian.
  • [Global initiative] The Bank for International Settlements (BIS) teamed up with the central banks of France, Japan, South Korea, Mexico, Switzerland, the United Kingdom, and the United States Federal Reserve Banks to explore asset tokenization within the monetary system alongside private financial institutions.

Major project launches:

  • BlackRock launched its first tokenized fund, BUIDL, on the Ethereum Network, capturing almost 30% of the $1.3 billion tokenized Treasury market in just six weeks and reaching ~$486 million in assets under management (AUM) as of July 2nd, 2024.

Outstanding expansion of tokenization:

Key RWA Tokenization Reports for Decision Makers

The first half of 2024 saw a significant increase in high-quality reports on RWA tokenization. These reports, authored by leading industry players like KPMG Singapore & Singapore FinTech Association (SFA), Deloitte, McKinsey, and Grayscale, and market data platforms like The Tokenizer offer valuable resources for decision-makers navigating this evolving market.

Below are some recommendations:

Looking Ahead: A Tokenized Future

The future of tokenized assets holds immense potential, with forecasts painting a promising picture. Boston Consulting Group (BCG) predicts a staggering $16 trillion market by 2030, representing a significant 10% of global GDP. McKinsey, another leading consultancy, offers a more conservative estimate, suggesting a potential value of $2 trillion by that same year.

Despite differing predictions, one theme is undeniable: jurisdictions worldwide are actively laying the groundwork for scale, compliant deployment of tokenization. However, like any nascent industry, RWA tokenization faces challenges. Widespread adoption is yet to be achieved, and issues around liquidity and composability need to be addressed. Embracing and enhancing them promptly will drive growth and innovation, ensuring the industry's resilience and success in the long run.