A joint report issued by BCG and two other companies has identified the RWA market to expand to $600 billion.
A paper written and published by Boston Consultancy Group (BCG), Aptos Ascend, and Invesco mentioned that the real world asset (RWA) market capitalization will grow to about $600 billion by 2030. While it talks about how the hype behind blockchain use cases has waned among the general population, the financial industry is only relying on them more than ever. And they feel RWA tokenization is a massively untapped sector that can revolutionize finance altogether.
“We see a pattern of growing investor demand in the tokenized funds space,” stated David Chan, Managing Director and Partner at BCG. “Over the coming period, we expect that trend to continue, especially when regulated on-chain money such as regulated stablecoin, tokenized deposit, and central bank digital currency (CBDC) projects materialize.”
BCG estimates that the valuation will go up to 1% of the global mutual funds and exchange-traded funds (ETFs) within the next seven years. Based on that estimation, RWAs will rise to $600 billion by the end of the decade.
“On-chain money introduces two important features – programmability and atomic settlement with tokenized assets – which serves as a catalyst for growth in tokenized funds,” said Alexandre Tang, Head of Institutions, APAC at Aptos Labs. “Once up and running, tokenized funds can offer advantages such as 24/7 secondary transfers and fractionalization, a lower threshold for investing, and instant collateralization if regulatory guardrails are put in place.”
Furthermore, the paper suggests that RWAs will ensure gaps in on-chain technology get bridged. It suggested flaws that niches like DeFi witness. RWAs, through established TradFi instruments that have been handled in the trillions by asset managers for decades, provide a more attractive option for investors across the board.
“Wealth and asset managers are navigating a changing technological landscape in how funds are distributed,” said Ken Lin, Head of Hong Kong and Southeast Asia Intermediary Business at Invesco. “The establishment of regulatory guidelines and global standards can help create a solid foundation for a frictionless, globally interconnected industry.”
The Following Year or So Is Highly Crucial for RWAs
Along those lines, the report also mentioned that the coming 12-18 months are crucial for RWAs and for actors wanting to enter the space. It speaks of how adoption will kick off to another level over this period as regulations worldwide are shaping up to allow asset types like stablecoins to be used without objection. Other regulations will push the entire blockchain ecosystem and niches like RWAs.
A Tren Finance report mentioned the RWA market cap to reach $30 trillion.
