RWA Sector Poised for $600B Growth by 2030: Report

A recent whitepaper from Boston Consulting Group (BCG), Aptos Labs, and Invesco suggests that the tokenized funds sector is on track to reach a staggering $600 billion by 2030.

• Currently, the market for tokenized assets, which includes tangible items like real estate, art, and traditional securities represented on a blockchain, has over $2 billion in assets under management (AUM).
• The anticipated growth is expected to accelerate as on-chain finance continues to evolve.

Benefits of Tokenization

The BCG report highlights several advantages of moving towards tokenization, including:

• Enhanced programmability and transparency
• Instant transactions and 24/7 transferability
• Increased liquidity and opportunities for fractional ownership

The report predicts that tokenized funds could capture at least 1% of the global mutual fund and exchange-traded fund (ETF) AUM by 2030, mirroring the rapid growth of traditional ETFs since their inception in the 1990s.

• With the mutual fund market projected to reach $60 trillion, this 1% capture would equate to approximately $600 billion.

Paths to Growth for Tokenized Funds

BCG identifies two primary strategies that could drive tokenized funds toward this projected valuation:

• New Fund Vehicles: Asset managers might create innovative fund structures targeting younger, tech-savvy investors.
• Conversion of Existing Structures: Existing mutual funds and ETFs could be transitioned into tokenized formats.

Regulatory Support and Market Potential

The report indicates that clear regulatory frameworks are crucial for this growth. BCG believes that with the right regulations, the market could potentially expand into the trillions, although the $600 billion forecast remains a conservative estimate.

• Regions such as Japan, Hong Kong, Singapore, and parts of the Middle East are preparing for this growth. For instance, the Hong Kong Monetary Authority (HKMA) is initiating projects like e-HKD+ and Project Ensemble to foster an environment conducive to tokenized assets and blockchain technology.

Industry Participation and Collaborations

Numerous blockchain companies and traditional financial institutions are entering this promising sector. Current data shows over $13 billion in total on-chain real-world assets.

• Earlier this year, Ripple partnered with Canadian startup Axelar to enhance RWA tokenization and improve interoperability within the XRP Ledger.
• Recently, Fidelity has also joined the movement, exploring stablecoins and tokenized treasury products.
• Additionally, Chainlink is collaborating with ANZ, one of Australia’s largest banks, as part of the Monetary Authority of Singapore’s Project Guardian to facilitate cross-chain exchanges of tokenized assets.