While US dollar-backed stubcoins continue to dominate the conversation, recent discussions with investors show that they focus on tokenizing real-world assets (RWAS), including stocks, bonds, bank deposits and real estate.
According to BOFA, this shift marks the beginning of a multi-year journey into fully blockchain-based transactions.
This transformation will require critical infrastructure development, but it promises 24/7 access, immediate settlement and increased liquidity across jurisdictions around the world. Everything is supported by smart contracts that ensure compliance.
Tokenization of real-world assets on the blockchain involves bringing traditional assets, such as real estate, bonds, and goods, into the digital realm. This process allows for partial ownership, ease of transaction and increased accessibility of these assets.
A notable example of this evolution is the recent launch of a tokenized real estate platform by the Land Sector of Dubai (DLD), bank analysts said.
The initiative aims to digitalize up to $16 billion in real estate by 2033, and will also introduce fractional ownership and expand access to previously illiquid asset classes, analysts say.
Bank of America said repeated concerns among investors are potential disruptions in the Citi(C) trading services business, which accounts for around 40% of bank revenue, as blockchain technology gains traction.
While the risk of disrupting traditional revenue streams, such as net interest income from deposits and fees, there is growing belief that investors may underestimate Citi's expertise and adaptability in blockchain technology, Bofa says.
The push for tokenization represents a significant milestone in the adoption of blockchain technology for real applications, the report added.
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