A new report from Boston Consulting Group (BCG) and Ripple projects that the market for tokenized financial assets, or real-world assets (RWAs), could grow to an impressive $18.9 trillion by 2033. This forecast comes as the technology approaches a “tipping point,” with an expected compound annual growth rate (CAGR) of 53%. The projection sits between the more cautious $12 trillion estimate and the optimistic $23.4 trillion scenario over the next eight years.
Tokenization—the use of blockchain technology to record and transfer ownership of assets like securities, commodities, and real estate—has been rapidly gaining momentum, especially as traditional financial institutions recognize its potential to reduce costs, streamline transactions, and facilitate 24/7 operations. JPMorgan’s Kinexys platform, for instance, has already processed over $1.5 trillion in tokenized transactions, and BlackRock’s tokenized U.S. dollar money market fund (BUIDL), issued in partnership with Securitize, is nearing $2 billion in assets under management while gaining traction in decentralized finance (DeFi).
“Technology readiness, evolving regulations, and real-world use cases are already here,” said Martijn Siebrand, Digital Assets Program Manager at ABN AMRO, in the report.
Successful Use Cases and Expanding Sectors
The report points to tokenized government bonds, such as U.S. Treasuries, as an early success. By tokenizing these instruments, corporate treasurers can effortlessly move idle cash into tokenized short-term government bonds, enabling real-time liquidity management without intermediaries.
Private credit markets are also beginning to experience the benefits of tokenization, opening up traditionally illiquid and opaque markets to investors, while providing clearer pricing and fractional ownership opportunities. Additionally, carbon markets are emerging as another area ripe for tokenization, where blockchain technology can improve transparency and traceability in the issuance and trading of emissions credits.
Challenges to Widespread Tokenization
While tokenization shows tremendous promise, the report identifies several hurdles preventing its mass adoption. Key challenges include fragmented infrastructure, limited interoperability between platforms, inconsistent regulatory frameworks, lack of standardized smart contracts, and unclear custody protocols. Most tokenized assets currently settle independently, and the absence of universal delivery-versus-payment (DvP) standards has prevented secondary markets from reaching their full potential.
Regulatory clarity remains uneven across regions. While countries like Switzerland, the EU, Singapore, and the UAE have developed solid legal frameworks for tokenized securities, others, including India and China, have restrictive or undefined regulations. This disparity makes cross-border transactions more difficult, requiring firms to adapt their infrastructure to the specific requirements of each jurisdiction.
The Road Ahead for Tokenized Markets
The report outlines a three-phase approach to the evolution of tokenized assets: the initial phase involves low-risk adoption of familiar assets like bonds and funds; the second phase expands to more complex financial products such as private credit and real estate; and the final phase includes the transformation of the broader market to include illiquid assets such as infrastructure and private equity. Many firms are currently in the first or second phase, with scalability dependent on regulatory advancements and infrastructure development.
Tokenization is expected to unlock substantial cost savings, particularly in areas like bond issuances, real estate fund tokenization, and collateral management. The report notes that tokenization projects can now be launched for under $2 million, while full end-to-end integrations—covering issuance, custody, compliance, and trading—can cost up to $100 million for large institutions.
However, the report concludes with a cautionary note: without coordinated efforts across the industry, the same silos and fragmentation that tokenization seeks to resolve could reemerge in a digital form. Jorgen Ouaknine, global head of innovation and digital assets at Euroclear, warned that without collaboration, tokenization’s potential could be undermined by the very barriers it was designed to eliminate.
