While there are various estimates in regard to how large the tokenization market of real world assets (RWAs) is growing it appears that June was a big month for the technology.
Digital assets, or tokenized RWAs, represent the future of securities and more as issuance and management can be streamlined reducing operational cost for buyers and sellers and conduits. Some predict that in just a few years tokenized assets will top trillions of dollars.
Richard Baker, founder and CEO of Tokenovate, says that tokenized assets and on-chain trading volumes hitting new highs in June indicates the technology is becoming embedded in core financial markets. The estimated $3.85 billion in tokenized equity volumes in June shows how quickly activity can pick up pace.
On the other hand, June saw three stablecoin depeg events including msUSD following the proof of reserves provider terminiating its agreement driving redemption reservers dramatically lower.
“The root cause was legal and operational, and it points to a broader pattern where issuance and trading volumes are scaling faster than the frameworks underpinning them,” said Baker. “The continued reliance on fragmented systems and manual processing only creates greater operational risk and more trapped liquidity as transaction volumes begin to scale.”
Baker explains that when a single event can generate billions of dollars in equity volume the services driving those trades need to be robust and operationally consistan as well as compliant.
“If tokenisation is to fulfil its potential of delivering faster and more efficient markets, standards such as the Common Domain Model can provide the semantic foundation for automated workflows and interoperable processes that makes that possible.”
Tokenization will create the most value at scale. Large financial services count pennies and significant volume of transactions can save both sides of the equation. Tokenization can also lead to a new era of assets being made investible as management costs go lower.
