Welcome to NYALA’s State of Tokenization, a new monthly snapshot of the evolving industry and its latest developments.
One of the highlights of the inaugural October edition is a report by 21.co, that estimates the current value of tokenized assets across public blockchains at $118.57 billion. JPMorgan makes waves with the first client trade on its Tokenized Collateral Network. Roland Berger also makes a bold prediction, forecasting the tokenized asset markets to exceed $10.9 trillion by 2030, fueled by the promise of reduced costs, transparency, and improved liquidity. In other news the recent acquisition of Securrency by DTCC is expected to further advance blockchain technology and Euroclear’s tokenized bond issuance marks a transformative moment. Finally, regulators from Singapore, Japan, the U.K., and Switzerland collaborate to explore the potential of asset tokenization’s, aiming for cross-border interoperability and sustainable digital asset growth.
21.co estimates the total value of tokenized assets at $118.57 billion [1]
The 21.co tokenization report highlights key insights into the evolving landscape of tokenization. Notably, digital dollars and USD stablecoins have emerged as a pioneering application of tokenization, constituting approximately 10% of the overall cryptocurrency market value. Additionally, a marked expansion in various asset categories, particularly U.S. treasuries, has been propelled by elevated interest rates. The report further emphasizes the growing trend of integrating conventional financial instruments, including securities, real estate, and diverse assets, into blockchain ecosystems. In terms of market sizing, the report estimates the total present value of tokenized assets on public blockchains at around $118.57 billion.
JPMorgan Announces First Client Trade on Tokenized Network [2]
JPMorgan has announced the first client trade on its Tokenized Collateral Network (TCN), a permissioned version of the Ethereum blockchain. The trade was executed between BlackRock and Barclays and involved the exchange of tokenized US Treasury bonds. BlackRock became the first client to use JPMorgan’s TCN. The world’s largest asset manager used the system to convert shares in one of its money market funds into digital tokens, which it then used as collateral in an over-the-counter derivatives trade with Barclays Plc. The TCN was launched to streamline and scale the process of traditional settlements on a blockchain. The use of decentralized technology made the process faster, more secure and more efficient.
Roland Berger estimates the market size of tokenized assets will exceed $10.9 trillion by 2030 [3]
The Roland Berger tokenization report underscores the transformative impact of tokenization, which is set to revolutionize asset ownership and investment. This is characterized by the substantial reduction of transaction costs, heightened transparency, and improved liquidity. Projections indicate that the cumulative market value of tokenized assets is anticipated to surpass USD 10 trillion by 2030, encompassing virtually every sector and industry, including investing, asset management, manufacturing, real estate, and art. Tokenization represents a present-day reality rather than a distant concept, and carries the potential to democratize access to real-world assets, extending beyond privileged and institutional investors to reach a broader public audience.
DTCC Acquisition: The Depository Trust & Clearing Corporation (DTCC) – a major clearinghouse, announced its acquisition of Securrency, a firm specializing in RWA tokenization [4]
DTCC’s acquisition of blockchain startup Securrency Inc. is a significant move in its broader push into blockchain technology. The deal, worth around $50 million, will allow DTCC to facilitate the issuance of securities like exchange-traded funds on blockchain networks. The acquisition is part of DTCC’s aim to accelerate the development of its enterprise digital asset platform to unlock the potential of institutional decentralized finance (DeFi). This platform is part of DTCC’s Project Ion, a standalone equity clearance platform that utilizes blockchain to support a T0 cycle. Furthermore, DTCC plans to launch the Digital Securities Management platform for private markets, which will provide maximum flexibility for firms and support Reg A and Reg D securities. The firm’s top areas of innovation interest include digital settlement, supporting CBDCs and the broad impact of DeFi on the financial industry.
Euroclear starts RWA Tokenization Service with World Bank’s 100M Euros Digital Bond Issuance [5]
Euroclear, a major European clearinghouse, has unveiled its tokenized securities issuance service with the World Bank’s €100 million digital bond issuance. The World Bank issued the first digital securities on a new D-FMI distributed ledger technology platform developed by Euroclear. Euroclear’s D-FMI enables the creation, issuance, and settlement of fully digital international securities. By using Euroclear’s established settlement platform for secondary market operations, investors can access a wide range of Euroclear System services. This first issuance in collaboration with Euroclear, TD Securities, and Citibank on Euroclear’s digital platform offers an opportunity to enhance digitization in the capital markets.
Singapore, Japan, U.K., Swiss Regulators Plan Asset Tokenization Pilots [6]
Regulators from Singapore, Japan, the U.K., and Switzerland are collaborating to conduct asset tokenization pilots, aiming to explore the potential of tokenizing various assets. The initiative, involving the Monetary Authority of Singapore (MAS), the Financial Services Agency of Japan (FSA), the Swiss Financial Market Supervisory Authority (FINMA), and the U.K.’s Financial Conduct Authority (FCA), seeks to advance legal discussions on digital assets, identify potential policy gaps related to tokenized solutions, and explore a common standard for digital asset networks. The partnership aims to foster the development of common standards and regulatory frameworks to support cross-border interoperability and sustainable growth of the digital asset ecosystem.
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1 The State of Tokenization – Research | 21.co
2 JPMorgan Announces First Client Trade on Tokenized Network – The Tokenizer
5 World Bank is the First Issuer on Euroclear’s New Digital Securities Platform
6 Singapore, Japan, U.K., Swiss Regulators Partner to Advance Asset Tokenization Pilots (coindesk.com)
