Stablecoins dominates the tokenization of real-world assets (RWA), while Standard Chartered (Stan) said it is seeing signs of a wider shift ongoing.
Currently, investment banks with only $23 billion in RWAS other than stable coins, with around 10% of the stubcoin market currently forecasting significant growth as regulatory clarity improves, with focus shifting from the chain to more meaningfully profitable assets.
Tokenization is one of the main uses of blockchain technology, attracting attention and investment from the Tradfi world. Stablecoins are cryptocurrencies that have value in other assets, such as US dollars and gold. They play a major role in the cryptocurrency market and are also used to transfer money internationally.
Jurisdictions like Singapore, Switzerland, the EU and jerseys are in the process of regulation, the bank noted, but inconsistency leaves your customer (KYC) rules at a standstill.
Still, the opportunity lies in targeting assets where tokenization adds real value, the report said.
“We believe that tokenization efforts should focus on chain-on-chain assets that are cheaper than chain equivalents, shorter liquids, shorter chain needs, or that solve on-chain needs, or that solve on-chain needs.”
The bank noted that tokenized private credit has shown promise by providing faster settlements and cost-effectiveness.
In contrast, efforts to tokenize already liquid assets such as gold and US stocks have limited traction, as they do not provide clear on-chain benefits.
Banks expect private equity and liquid off-chain products to become the next growth area for unstable tokenization.
read more: Stablecoin Market could grow to 2T by the end of 2028: Standard Charter
