Tokenizing Real-World Assets In 5-10 Years

According to Cynthia Wu, Founding Partner and COO of digital asset service platform Matrixport, almost every "real world" asset class might be tokenized in the version of a nonfungible token in five to ten years. The best case scenario for NFTs, according to Wu, would be a widespread representation of actual assets to be kept and sold on-chain.

The move to the blockchain would make these real-world assets "more liquid and tradable," improving price discovery and transaction activity, according to Wu.

However, she stated that, while it is great that we have created over two trillion dollars in digital native assets on-chain from Bitcoin (BTC), Ether (ETH), and other tokens, the only niche that has produced NFT transaction activity has emerged from digital collectibles — that hasn't really aided institutional adoption.

Nonetheless, Wu believes the tide is turning. According to a report released earlier this month by Boston Consulting Group (BCG), the total value of tokenized illiquid assets might reach $16.1 trillion by 2030.

BCG predicted that pre-initial public offering (IPO) stocks, property investment, private debt, and money made by small to medium-sized businesses would account for a large portion of this tokenization.

Whereas the tokenization of property wealth has captivated the interest of financial institutions, Wu claims that some are hesitant to abandon the legacy systems that have provided them well over the years.

She stated that the traditional financial system has not accounted for the trading of nonfungible investments because they cannot be easily exchanged in the same way that fungible or divisible assets can, but tokenization on the blockchain offers a solution for that.

She also contended that blockchain facilities are preferable to legacy systems, citing cost efficiencies, enhanced liquidity, 24/7 market access, and the elimination of middlemen as the key factors that would ultimately lead to a more simplified financial system.

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