The State of Asset Tokenization 2024 Outlook
Expert Perspective #1
Tokenization, — Redux Anthony, Bassili Coinbase Institutional
Tokens are emerging as the next financial “share class,” their success hinges on their ability to operate on global, permissionless public ledgers. The benefits of tokenized share classes are numerous, and their integration into daily workflows is expected to increase. Tokenization is expected to significantly change traditional assets’ liquidity, composability, and risk management.
In 2023, new entrants in the #RWA space witnessed a surge in tokenized U.S. Treasury exposure, demonstrating the potential for higher-yielding products. This trend will extend to other market instruments like equities, private funds, insurance, and carbon credits in 2024, catering to client demand for diversified returns.
Tokenization democratizes investments, saves fees, and increases transparency. However, regulatory ambiguity and jurisdictional complexities pose challenges, resulting in fragmented liquidity for large regulated institutional players. This limits the full benefits of tokenization for a robust financial system.
Expert Perspective #2
Bringing Crypto to the World with Improved Wallet UX, Carter Appleton Goldfinch Protocol
On the heels of 2023’s momentum, three “institutional buckets “will improve substantially in 2024 and begin to close the gap between the on-chain and off-chain worlds:
- Investors
- Infrastructure
- Investment
Institutional investors are increasingly interested in tokenized assets due to their improved efficiency gains and potential benefits. Despite existing infrastructure and operations, institutional investors are willing to wait and learn as crypto-native investors experiment with different investment theses. With an election year in the U.S. and falling rates, the appetite and interest to experiment could improve within the institutional ranks. Various papers have proven that today’s on-chain infrastructure offers economic benefits and benefits to wealth management, making it an attractive option for institutional investors.
The infrastructure efficiencies are being proven, and as more blockchains, DAO treasuries, and other significant sources of crypto-native capital continue to be allocated to RWAs, the infrastructure will continue to move more money, manage more assets, and provide greater security and certainty of execution, closing the risk premium between on-chain and off-chain investments.
Conclusion
Adopting disruptive technology, such as tokenized asset markets, is expected to continue in 2024. Stablecoins will expand to represent a broader range of assets; U.S. Treasury products will find excellent market fit; asset managers will explore tokenized private credit for alternative liquidity sources; and financial institutions and governments will utilize digital bonds for new issuance mechanisms.
About Phyken Network
RWA tokenization and fractionalization protocol focused on bringing green and renewable energy assets on-chain.
