According to a recent research report by Bernstein, the advantages of tokenization are evident, encompassing operational efficiencies, enhanced liquidity, and improved accessibility. Tokenization involves the conversion of real-world assets into blockchain-based tokens.
Bernstein projects a substantial opportunity for tokenization, estimating a potential market size of up to $5 trillion in the next five years. This growth will be primarily driven by stablecoins and central bank digital currencies (CBDC), private market funds, securities, and real estate.
According to a recent report, the application of currency tokenization, particularly through stablecoins and central bank digital currencies (CBDC), is expected to revolutionize on-chain deposits and payments. The report suggests that approximately 2% of the global money supply, equivalent to $3 trillion, will be tokenized within the next five years.
The analyst, led by Gautam Chhugani, anticipates a significant increase in the circulation of stablecoins and CBDC tokens, primarily by China’s CBDC program. They believe that these digital currencies, along with decentralized market yield farming, will emerge as strong contenders against traditional bank deposits as investment and saving instruments.
However, the report also acknowledges the existing regulatory uncertainties surrounding tokenization. The success of blockchain-based tokenization relies heavily on policymakers recognizing the benefits of blockchains and understanding the crucial role of crypto tokens in blockchain operations.
The note further emphasizes that the regulatory framework adopted by policymakers will shape their perception of tokenizing real-world assets. It cautions that unfavorable regulations could potentially diminish the advantages offered by tokenization.
Also read: IMF’s Global CBDC Platform in Progress
