Digital Asset has released a report highlighting developments related to the tokenization and on-chain adoption of Real-World Assets (RWAs).
The report from Digital Asset Research “includes details on centralized industry players and asset class coverage, as well as coverage of select decentralized finance protocols working to integrate RWAs on-chain.”
Information is compiled from Digital Asset Research’s (DAR’s) data sources, and a diverse set of other key sources.
This report is said to cover only representative initiatives “related to the development and tokenization of RWAs in the digital asset space.”
While many cryptocurrencies offer solutions to the challenges encountered by Web3 users, only a few digital assets “possess characteristics that connect them to real-world economic activities.”
The report points out that skeptics contend “that cryptocurrency use cases are confined to the digital realm, and therefore the value of crypto assets is not sustainable, given that much of daily life revolves around the physical world.”
Real-world asset tokenization bridges this gap “between the physical and digital worlds. Real-World Assets (RWAs) are assets that exist tangibly offline, such as real estate or equities.”
Tokenization refers to the “process of generating a digital certificate that is impervious to alteration or replication to represent an RWA on a blockchain.”
These digital certificates are backed “by real-world assets as collateral.”
Through tokenization, investors can “gain access to conventional investment opportunities in a more trustless and efficient manner via blockchain technology.”
Settlement can be conducted “in real time and investors are always able to see where their assets are stored on chain.”
The spectrum of assets that could “be tokenized includes but is not confined to, real estate, private credit, securities, commodities, and fiat currencies.”
A significant proportion of the world’s financial value “is ascribed to RWAs, thereby presenting the potential for RWA tokens to access a total addressable market equivalent to the largest financial markets.”
In this report, entities working on RWA initiatives are detailed in three groups:
- Centralized organizations that offer tokenization services are detailed in the CeFi RWA sections.
- Decentralized Finance (DeFi) protocols that integrate RWAs with on-chain market participants are detailed in the DeFi RWA sections.
- On-chain U.S. Treasury products, which include products from both CeFi and DeFi platforms, are detailed in the RWA U.S. Treasury Protocols section.
Significant RWA Tokenization Developments:
- BlackRock launched a tokenized fund, BUIDL, on the Ethereum blockchain.
- Citibank tested the tokenization of private equity funds on the Avalanche network.
- Goldman Sachs, BNY Mellon, and others tested an enterprise blockchain for tokenized assets.
- Russian President Vladimir Putin signed a law to use digital assets in international payments.
- The Hong Kong Monetary Authority (HKMA) published guidance on the sale and distribution of tokenized products.
- HKMA announced Project Ensemble to support the development of Hong Kong’s tokenization market.
- A group of seven central banks started a tokenization project that aims to improve existing financial systems.
- Sygnum Bank tokenized $50 million in assets in Fidelity International’s money-market fund fund for Matter Labs, which was transferring its reserves to the blockchain.
- The BIS Innovation Hub, Swiss National Bank, and World Bank introduced Project Promissa to pilot the tokenization of financial instruments.
- Finoa, a crypto custodian, began offering Centrifuge’s tokenized treasury bill fund to clients.
- GF Securities (Hong Kong) issued digitized bonds using ABT Tech Limited’s RWA tokenization platform.
For more details, check here.
